According to Yonhap News,

(SEJONG=Yonhap News) South Korea on Wednesday unveiled a set of measures to spur corporate investment in new industries as part of its efforts to bolster exports that have been plunging amid faltering oil prices and waning global demand.

In a trade and investment promotion meeting chaired by President Park Geun-hye, the Ministry of Trade and Industry & Energy said it will encourage the private sector to invest 44 trillion won (US$36.4 billion) in the electric car and other new technology sectors over the next three years by removing red tape and helping companies tap into new overseas markets.

The ministry said it will shorten the legal and administrative processes of giving product certifications and export permissions, and lift regulations on sales and distribution to help companies enter overseas markets promptly.

If the investment plan goes without a hitch, it is estimated to increase the country's output by $98 billion, boost exports by an additional $65 billion and create 415,000 new jobs.

"The plan involves short-term measures aimed at tackling the recent export doldrums and long-term programs to spur the private sector into investing in new industries in order to develop new export items," the trade ministry said in a news release.

In line with the trade ministry's measures, the Ministry of Strategy and Finance also announced a plan to create a business-friendly environment to bolster corporate investment.

It will build a corporate research and development cluster around 300,000 square meters in southern Seoul, ease construction regulations and give visa benefits to help companies focus more on R&D investment.

The ministry also came up with programs to spur investment by creating new service markets like the sharing economy and the sport agent system in a way to keep up with new business trends.

The country's exports have been decreasing for more than a year due to weakening global demand and heightened competition in key industries, such as smartphones and cars.

South Korea's outbound shipments plunged 18.5 percent on-year in January, marking the fastest drop since the 2008 global financial crisis. At the same time, ICT exports, which accounted for 32 percent of all exports, also dived 18.5 percent on-year last month, the sharpest decline in seven years.

As a result, the South Korean government has churned out a number of fiscal policies to meet its 2016 growth target of 3.1 percent since the beginning of the year, including new stimulus packages to frontload more than 40 percent of the annual budget in the first three months.

The finance ministry said the investment-promotion programs will help the country attain its growth target at the end of the year, although it works in an indirect way.

"The moves will encourage companies to make investment-related decisions and spend more money. This will consequently lead to bringing in additional effects," Deputy Finance Minister Lee Chan-woo said.

"We've used fiscal spending to back economic growth so far. Now we focus more on the private sector's role. If we find ways to expand private investment, we will be on the right path to reach the goal."

Stung by sinking exports and weak domestic demand, South Korea's economy grew 2.6 percent on-year in 2015, slowing from a 3.3 percent advance the previous year.

Seoul has forecast Asia's fourth-largest economy will grow 3.1 percent on-year in 2016 thanks to improving exports and consumer spending, while the Bank of Korea has slashed its growth estimate to 3 percent from an earlier 3.2 percent.

Finance Minister Yoo Il-ho said in a press conference that the government will never let its guard down in the midst of escalating geopolitical tensions in the Northeast Asian region following North Korea's nuclear test and rocket launch.

"I will monitor the financial market around the clock to prevent excessive anxiety from spreading throughout the entire economy coupled with global uncertainties," said Yoo, who also doubles as the deputy prime minister for economic affairs. "If there is an unusual problem, the government will take swift and firm action."

brk@yna.co.kr

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