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(SEOUL=Yonhap News) Starting this year, areas with a high concentration of businesses in industries in crisis can be designated as 'Special Crisis Response Areas' (hereafter 'Special Areas').

The Ministry of Trade, Industry and Energy announced Mar. 5 that the amendment to the Special Act on Balanced National Development, designed to introduce the new Special Area system, has passed through the National Assembly's general meeting.

The recent amendment was carried out as part of the government's Plan to Revitalize Shipbuilding Areas announced Oct. 31 of last year.

While shipbuilding areas, which are currently in crisis, have been made eligible for immediate support without being designated as a Special Area, the amendment was proposed in case other industries such as steel or petrochemical reach a similar state of crisis, and cause specific areas to suffer as a result.

It would be as if a particular area hit with large-scale temporary or permanent closure of businesses or unemployment due to financial difficulties such as industrial restructuring, could be designated as a Special Disaster Area in economic and industrial fields, so that different government organizations can swiftly collaborate to help it through recovery.

If designated as a Special Area, short-term support to help stabilize business management and employment, and revitalize markets, etc., will be provided so that immediate crisis situations may be averted.

In the mid- to long-term, government-wide support will be provided through 6 major industry support programs in accordance with the particular area and industry, to improve the structure and composition of local economies by nurturing alternative industries.

To receive Special Area designation, which will be administered at the city (si), county (gun), or district (gu) level, the area must first apply to the metropolitan city mayor or province governor in charge of the area in crisis, upon which expert organizations will help in reviewing how dependent the local economy is on that industry, as well as the severity of the local economic depression, and the final decision will be made after discussions take place between related ministries and other government organizations.

The trade ministry intends to complete the amendments to subordinate legislation containing the specific requirements, procedures, support details, etc., necessary for the designation and management of Special Areas by late June, and begin implementing the new system in the second half of this year.

eun@yna.co.kr

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Source: Yonhap News (Mar. 5, 2017)