[Q&A] Vice Minister of Economy and Finance: "New Deal Fund Expected to Produce 10-15 Funds Over 100 Billion Won"

Regular Briefing of the 17th Emergency Economic Central Disaster and Safety Countermeasure Headquarters Meeting on the 28th

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Kim Yong-beom, 1st Vice Minister of the Ministry of Economy and Finance, said on the 28th regarding the New Deal Fund, "Rather than having dozens of funds worth 50 billion won or 100 billion won, I expect there will be about 10 to 15 funds ranging from 100 billion won to 500 billion won."

At the regular briefing of the 4th Korean New Deal Ministerial Meeting and the 17th Emergency Economic Central Disaster and Safety Countermeasure Headquarters Meeting held that day, Vice Minister Kim said, "It is difficult to generalize, but policy-type funds such as the Digital New Deal are likely to be somewhat larger in scale than the startup funds currently available in the market."

The following is a Q&A with Vice Minister Kim

▲ Some targets that seem unrelated to job projects were also included.

=Rather than matching each one directly to a job, the key is that many jobs should be created in the process. Regarding the Digital New Deal and Green New Deal, when the industry develops dramatically in the future, it will be possible to take the lead in core technology areas that serve as the source. For example, in relation to gas turbine manufacturing, the issue is not jobs but whether or not the technology is secured in the future.

▲ Will the momentum for promoting the New Deal Fund decline if the government changes?

=The budget reflected this year means that the fund will be formed early next year, and actual execution will begin in the first half of next year. It will be completed within a year, but rather than that, once the fund is formed, investments will be made over several years. Since tax benefits, once given, do not disappear within a year, the fund will be formed and executed on a fairly large scale over several years. We do not expect it to flare up briefly and then fade away within 1 to 2 years.

▲ What is the expected number of funds and the average amount per individual fund?

=If the funds are worth 300 billion to 500 billion won, there will be about 10 to 15. If the funds are somewhat smaller, around 100 billion to 200 billion won, the number will be larger. Ultimately, it will depend on the scale of the initial investment. I think recruitment will focus on projects somewhat larger in scale than the policy funds currently available in the market.

▲ Renewable energy, robots, etc. are already saturated in the existing market; how will differentiation from existing products be achieved?

=There is some overlap. Since we are not discovering and presenting completely new fields that do not exist in the world, there is inevitably some overlap with existing businesses. However, compared to before the announcement of the Korean New Deal, relatively differentiated investments will likely be made more intensively in the digital sector.