[Weekly Review] Bureaucrats Forward-Deployed by Moon... K-Semiconductor and K-Battery Strategies Announced in First Half

Prime Minister nominee Kim Boo-kyum is coming out of the temporary office set up at the Financial Supervisory Service Training Institute in Jongno-gu, Seoul, on the 16th, sharing his thoughts with the press. Photo by Moon Ho-nam munonam@

[Sejong=Asia Economy Reporter Kwon Haeyoung] President Moon Jae-in has appointed Kim Boo-kyum, a former Minister of the Interior and Safety from the Yeongnam region, as the last Prime Minister of his administration. He carried out a mid-level reshuffle replacing ministers of five departments, including the Ministry of Land, Infrastructure and Transport, which oversees real estate policy, as well as the Ministry of Trade, Industry and Energy, the Ministry of Science and ICT, the Ministry of Employment and Labor, and the Ministry of Oceans and Fisheries. This move is interpreted as an intention to operate the government focusing on harmony and stability in the latter half of the term through a 'unified' Prime Minister and a 'practical' cabinet.

Prime Minister nominee Kim Boo-kyum stated on the 16th, "The most important tasks for the remaining one year of the current administration are jobs and the livelihood economy." He added, "We will establish principles and reform issues such as real estate problems and the Korea Land and Housing Corporation (LH) speculation scandal," emphasizing, "We will prepare practical measures so that the 2030 generation can nurture their dreams for the future."

Contrary to expectations, former Prime Minister's Office Coordination Officer Noh Hyung-wook, an economic bureaucrat, was appointed as Minister of Land, Infrastructure and Transport. Ministers of the Ministry of Trade, Industry and Energy, Ministry of Employment and Labor, Ministry of Science and ICT, and Ministry of Oceans and Fisheries were also appointed from bureaucrats and experts, emphasizing stable management. Moon Seung-wook, Deputy Minister of the Prime Minister's Office Coordination, was appointed Minister of Trade, Industry and Energy; Ahn Kyung-duk, Standing Member of the Economic, Social and Labor Council, as Minister of Employment and Labor; Lim Hye-sook, Chairperson of the National Research Council of Science & Technology (NST), as Minister of Science and ICT; and Park Jun-young, Vice Minister of Oceans and Fisheries, as Minister of Oceans and Fisheries.

◆Japan decides to discharge contaminated water from nuclear plant... Korean experts expected to be included in IAEA inspection team＝ The International Atomic Energy Agency (IAEA) is positively considering including Korean experts in the inspection team to verify the safety of Japan's Fukushima nuclear plant contaminated water discharge into the ocean. The government has expressed its willingness to participate several times by presenting a pool of Korean experts to the IAEA, and it is reported that a favorable response was received from the IAEA staff.

The government plans to dispatch Korean experts to the IAEA's Waste Safety Department within the first half of the year. The Waste Safety Department is responsible for evaluating waste discharge, including contaminated water from the Fukushima nuclear plant. The government intends to strengthen monitoring by dispatching one researcher from the Korea Institute of Nuclear Safety.

[Image source=Yonhap News]

◆Government to announce K-semiconductor and K-battery strategies in the first half of the year= The government will pour out support measures for our key industries such as 'K-semiconductor,' starting next month, followed by 'K-battery' and 'K-automobile' within the first half of the year. This is a measure to strengthen industrial competitiveness amid rising awareness of crisis across our key industries, triggered by the semiconductor hegemony competition between the U.S. and China.

On the 15th, the Ministry of Trade, Industry and Energy reported the 'Major Strategic Industry Inspection and Leap Support Plan,' including these contents, at an expanded economic ministers' meeting presided over by President Moon. After collecting industry opinions and consulting related ministries, the Ministry will announce the 'K-semiconductor Belt Strategy' next month, followed by the 'Battery Industry Development Strategy' and 'Parts Industry Future Car Transition Measures' within the first half of the year. At the end of the year, a 'Transportation Sector Future Car Transition Strategy' will also be released.

In particular, regarding semiconductors, the government plans to promote the enactment of a 'Semiconductor Special Act' and nurture 4,800 semiconductor specialists over two years. Regulations such as the Chemical Substances Registration and Evaluation Act (Chemicals Act) and the Chemical Substances Control Act will also be eased. The government is also considering expanding the current tax credit for facility investment, which is 3-6% for large companies, further. The industry has requested the government to expand the tax credit limit up to 50%.

◆Bank of Korea keeps base interest rate at 0.5% per annum＝ The Monetary Policy Committee of the Bank of Korea decided on the 15th to maintain the base interest rate at the current 0.50% per annum. This is the seventh freeze since July last year.

However, buoyed by the recovery in exports and facility investment, it forecast that this year's Gross Domestic Product (GDP) growth rate will exceed the February projection of 3.0%. The consumer price inflation rate is expected to fluctuate around 2% for the time being. While anticipating a rapid economic recovery and inflation exceeding 2%, it is interpreted that the committee judged the uncertainty related to the COVID-19 developments to remain high.