- Information Center
- Korean Economy
Amid the desperate global grappling against the COVID-19 pandemic all around, no other government has provided more comprehensive and far-reaching series of economic plans than the Biden Administration. The audacious plans, which are central to Biden’s Build Back Better agenda, started with the UDS 1.9 trillion budget American Rescue Plan (ARP) in March, 2021, and will be followed by the USD 2.2 trillion American Job Plan (AJP) and the USD 1.0 trillion American Family Plan (AFM).
While the first ARP puts its focus upon immediately rescuing the American economy and people from the pandemic, the second AJP and the third AFP are aiming to rebuild American jobs and family welfare on a much longer and sustainable perspective. AJP, for example, would mobilize USD 2 trillion in eight years to provide more jobs by overhauling old infrastructures such as pipes, roads, dams, transit systems, and broadband into a completely renewed transformation. Also, AJP would endeavor to passionately address climate change. AFP, although predominantly oriented towards providing better and prolonged healthcare and family support, it also undoubtedly necessitate huge expenditures in childcare and healthcare products. All these projects would create huge demand for related products, materials, parts and components.
The total budget for the three American Plans being estimated to be almost USD 5 trillion, the size of the consequentially induced demands for materials, parts, products, and commodities associated with the plans will be huge, approximately in the trillion dollar range. Of course, the government will try to procure them mostly from domestic sources, but a substantial part of it has to come from foreign origin due to unavailability, high price or quality standards. Anyway, Biden’s mega-sized tripartite ambition would create extraordinary economic opportunity for potential producers of such related goods and services, if they are ready to provide them with high enough quality, sufficient speed, and satisfying competitiveness. Above all, the Korean public and corporate agents in the US have to have first-hand information about the US federal and state projects and their schedules. Most of the programs are to be appropriated through the Congress, the Korean agents must maintain constant vigilance upon the activities of federal and state legislatures. Also, the Korean government and private sectors have to maintain amicable relationships with American counterparts in order to maximize the fruits of mutual cooperation between the two parties. Where it finds inevitable, Korean firms could decide to build plants in the US, and also, US corporations could set up facilities on Korean soil, to facilitate the proper supply-chain operation of Biden’s American Plans.
It is not one country just taking advantage of the other, nor is it providing privilege to the other without quid pro quo. It is fundamental work of mutually beneficial trade, which is the foundation of a free capitalistic society. Korean firms and the government have to stand ready to utilize this unprecedented opportunity that the Biden administration is about to unveil.
By Professor Se Don Shin
Dean, Sookmyung Women’s University
The opinions expressed in this article are the author’s own and do not reflect the views of KOTRA