Systematic Management of Industrial Crisis Areas... Cabinet Meeting Approves Enforcement Decree

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Dongwoo Lee] Going forward, if the number of businesses or workers significantly decreases due to the decline of major local industries, the government will proactively engage in crisis management.

According to the Ministry of Trade, Industry and Energy on the 15th, the Cabinet approved the Enforcement Decree of the "Special Act on Responding to Regional Industrial Crises and Revitalizing the Regional Economy" (Regional Industrial Crisis Response Act) at the Cabinet meeting held that day. The enforcement decree expands and reorganizes the existing "Special Act on Balanced National Development" system for special industrial crisis response areas and will take effect from the 18th.

This is significant as it systematically establishes measures to prevent the spread of industrial decline, such as the closure of the GM Gunsan plant, from affecting the overall regional economy. The government classifies industrial crisis areas into four stages: pre-crisis, early, middle, and post-crisis, and supports them through funding, tax benefits, and reductions in fees for the use of public property.

According to the enforcement decree, before the crisis, mayors and governors can autonomously establish and implement industrial crisis prevention plans, and the government supports areas such as research and development, infrastructure establishment, and workforce training based on the prevention plans developed. In the early crisis stage, areas are designated as industrial crisis preemptive response areas, and support is provided for the recovery of crisis industries in fields including finance, employment stability, market access, consulting, and industrial infrastructure development.

If a crisis originating in a region's main industry spreads to the overall regional economy or persists despite designation as an industrial crisis preemptive response area, the crisis is classified as the "middle" stage and the area can be designated as a special industrial crisis response area. In this case, industries that can replace the crisis industries are fostered, and support is provided for protecting small business owners and revitalizing commercial districts to aid regional economic recovery. Additionally, if the designation period of the special industrial crisis response area expires but regional industrial recovery remains insufficient, support continues using industrial crisis prevention measures.

Efforts are also being made to establish a foundation for system operation. To timely identify crisis factors occurring in regions, the Korea Institute for Industrial Economics and Trade will build a "Regional Industrial Comprehensive Information System" to systematically collect and analyze economic indicators by region. Furthermore, annual surveys will be conducted and reflected on regional industrial structure, business environment, employment trends, as well as business suspension and closure status.

Meanwhile, at the same Cabinet meeting, the partial amendment to the Enforcement Decree of the "Act on Compensation and Support for Areas Surrounding Transmission and Transformation Facilities" (Transmission Area Act) was also approved. Through this amendment, starting next year, the proportion of resident support projects in the relevant areas can be expanded up to 100%. When requesting a resident support project proportion exceeding 50% of the total support funds, a consensus opinion signed by all residents must be obtained. Previously, before the amendment, resident support projects could not exceed 50% of the total support funds (village joint support projects + resident support projects), which caused dissatisfaction among residents.

The Ministry of Trade, Industry and Energy stated, "By proactively implementing industrial crisis prevention measures and enabling the government to promptly support regions upon industrial decline based on local requests, this will greatly contribute to stabilizing the regional economy," and added, "With the amendment to the Transmission Area Act expanding the proportion of support projects, an increase in resident satisfaction is expected."

This content was produced with the assistance of AI translation services.