Urgent 40 Trillion Won Support for Key Industries, 'Half Disappearing' National Assembly Political Affairs Committee as a Variable

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance (center), Lee Jae-gap, Minister of Employment and Labor (right), and Eun Sung-soo, Chairman of the Financial Services Commission, are briefing on the contents of the '5th Emergency Economic Measures Meeting' presided over by President Moon Jae-in at the Government Seoul Office in Jongno-gu, Seoul, on the 22nd. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Park Cheol-eung] The government has decided to issue fund bonds worth 40 trillion won to support key industries such as the aviation sector, but it remains to be seen whether it can pass the National Assembly's Political Affairs Committee. More than half of the committee members were either defeated or did not run in the recent general election, making discussions difficult, and the opposition party opposes measures that increase the government's burden, such as bonds.

On the 23rd, Yoo Dong-su, the Democratic Party's floor leader in the Political Affairs Committee, said in a phone interview with Asia Economy, "We plan to hear the opinions of the Political Affairs Committee members on the amendment to the Industrial Bank Act for supporting key industries starting today," adding, "Many members either left the party or were defeated during the general election, so discussions are not easy."

The Financial Services Commission announced the establishment of a 40 trillion won "Key Industry Stabilization Fund" at an emergency economic meeting the day before. The fund targets seven key industries: aviation, shipping, shipbuilding, automobile, general machinery, electricity, and telecommunications, and involves issuing fund bonds guaranteed by the state. The Financial Services Commission stated, "We will promptly seek the National Assembly's consent. We will submit the amendment to the Industrial Bank Act by the 24th." Although urgency is key, the situation in the National Assembly is challenging.

Among the 23 members of the Political Affairs Committee, only 10 were successfully re-elected. Chairman Min Byung-doo, after losing the Democratic Party nomination, ran as an independent but eventually declared he would not run. Fellow party members Choi Un-yeol and Je Yoon-gyeong did not run, and Jeong Jae-ho strongly opposed his cut-off, stating, "Excluding me from the nomination due to an inconvenient physical condition is discrimination against people with disabilities."

This has increased the role of Yoo Dong-su as the floor leader. Among opposition party members, only four?Kim Seong-won, Seong Il-jong, Yoo Ui-dong, and Joo Ho-young?will continue to serve in the 21st National Assembly. Kim Jong-seok, who was the floor leader of the United Future Party, did not run and moved to the proportional satellite party, the Future Korea Party, while Jisang-wook, Kim Seon-dong, Kim Jin-tae, and Kim Yong-tae were defeated. Jang Byung-wan of the Minsheng Party, Chu Hye-sun of the Justice Party, and Jeong Tae-ok, an independent, also failed to be re-elected.

The United Future Party emphasizes minimizing the government's burden as a principle in responding to the economic crisis caused by the novel coronavirus disease (COVID-19). Just as they oppose issuing government bonds to fund emergency disaster relief payments, they may also oppose the key industry fund bonds since the government must guarantee them.

A government official said, "The key industry fund bonds have the same structure and method as those used during the past IMF (International Monetary Fund) foreign exchange crisis and the global financial crisis," adding, "The variable is how smoothly and quickly discussions can proceed in the National Assembly's Political Affairs Committee."