S. Korea vows financial support to boost overseas infrastructure orders

The Ministry of Economy and Finance on Monday vowed maximum efforts to help domestic businesses win overseas orders, seeking economic revitalization amid the prolonged COVID-19 fallout.

South Korea’s preemptive policy move reflected its expectations that key economies will soon expand infrastructure businesses in order to recover from the epidemic crisis.

“The government has selected 30 key projects totaling $100 billion, focusing on those that are likely to be successfully completed within the next two years,” said Deputy Prime Minister and Finance Minister Hong Nam-ki in a meeting of economy-related ministers held at Seoul Government Complex.

Of the total, $30 billion worth of deals are anticipated to be finalized within this year, according to the minister.

To effectively back these priority infrastructure projects, authorities will set up funds worth 3.7 trillion won ($3.05 billion).

The package includes 1.5 trillion won in global plant infrastructure smart city funds, 400 billion won in global infrastructure funds, and 1.8 trillion won in financial programs provided by the state-run Export-Import Bank of Korea and the Korea Trade Insurance Corp.

The government will also set aside 10.9 trillion won of funds in state guarantees and loans, providing for large overseas orders.

Under the slogan “Team Korea,” the Finance Ministry will lead the financial support task force, with the help of the Land Ministry, Trade Ministry and Foreign Ministry, Hong added.

The pangovernmental task force will also discuss ways of integrating overseas construction-related information on a single platform for efficiency.

The list of selected projects is speculated to include a road construction in Bangladesh, a new town model complex in Myanmar and several others in the Southeast Asian region. The Seoul government did not unveil the full list, citing diplomatic considerations with counterpart countries.

Separately, Seoul will also kick off talks with Cambodia within July, seeking to sign a bilateral free trade agreement, to follow up on an earlier joint feasibility study conducted in November last year, according to the fiscal policymaker.

During the ministerial meeting, officials addressed Korea’s renewed strategies for international cooperation in the post-coronavirus context.

“The government will work to provide $100 billion in humanitarian aid, over $400 billion in economic development cooperation funds, and expand the trust funds in multilateral development banks to $10 million from the conventional $2 million,” Hong said.

The fiscal chief also pledged to create a fund worth 1.2 trillion won to support Korea’s bio industry, as part of efforts to promote the so-called “K-quarantine model” globally.

By Bae Hyun-jung (tellme@heraldcorp.com)