Construction Association Requests "SOC Budget Over 30 Trillion Won for Next Year"

[Asia Economy Reporter Yoo In-ho] The Korea Construction Association requested the government on the 26th to allocate more than 30 trillion won in the 2021 SOC budget to resolve the national and local economic recession caused by the novel coronavirus infection (COVID-19) crisis and to create jobs.

The Construction Association submitted a proposal containing this request to the Ministry of Economy and Finance and the Ministry of Land, Infrastructure and Transport, stating that Korea has expanded SOC investment as a means to overcome crises during economic downturns caused by epidemics and national economic crises.

In the proposal, the Construction Association argued that the contribution rate of construction investment to economic growth has been proven to be an immediate and effective policy tool for overcoming crises, exceeding 50% during past crises such as the IMF foreign exchange crisis (1998) and the global financial crisis (2009).

It also emphasized that due to the COVID-19 crisis, major economic institutions are forecasting negative growth rates for the global economy this year, and there are concerns about a prolonged domestic economic recession.

According to the Korea Construction Industry Research Institute, the additional decline in construction investment due to the COVID-19 crisis is expected to reach up to 3.7%, approximately 10 trillion won. The decrease in construction investment is expected to reduce the number of employed persons by up to about 110,000.

Accordingly, new SOC projects were proposed, including ‘building digital infrastructure for innovative growth’ to overcome the crisis, ‘public investment in special disaster areas’ for balanced national development, and ‘establishing disaster response infrastructure’ to respond to urgent disasters.