K-sure to support exports to Iran
By Yoon Ja-young
Kim Young-hak K-sure Chairman
Korea Trade Insurance Corporation (K-sure) plans to provide 196 trillion won worth of trade insurance this year and increase support for businesses exporting to new markets such as Iran and Cuba. It aims at helping sustaining faltering exports, its chairman and president Kim Young-hak said, Tuesday.
“Thirteen items make up 75 percent of Korea’s exports. It has been hesitating to diversify its export items. The government is planning to expand to other items such as consumption goods and cultural content, and K-sure will also focus on those,” Kim said.
He said that the state-run export credit agency will concentrate on helping small and medium sized companies with their exports. It plans to provide 46.5 trillion won worth of trade insurance for the SMEs, which will increase the total trade insurance it offers this year to 196 trillion won from last year’s 168 trillion won.
The announcement comes amid increasing concern over faltering exports, which have been the sustaining pillar of the economy. The country’s exports dipped 18.5 percent in January from the previous year, marking the biggest plunge since August 2009 when the country was hit by the global financial crisis. While there seems to be little solution, as the dip is due to decreasing global demand, the government has placed sustaining exports as its first priority.
In line with such efforts, K-sure allocated another 14.7 trillion won to financially support the overseas projects of SMEs, helping them advance into new markets as well as nurturing new growth engines for exports such as services and consumption goods.
Its guarantees for start-ups will also be expanded to 150 million won from 50 million won, and trade companies that export products manufactured by SMEs will be given a 25 percent discount in insurance premiums.
Kim pointed out that the government’s diverse support programs are concentrated on a few champion firms. “That is incurring the moral hazard of firms. We will support firms that are shunned due to poor financial structure, but with good contents,” he said.
It is also strengthening support for exporters advancing into new markets such as Iran and Cuba. Korean businesses are eying Iran after the lifting of sanction. It signed a comprehensive MOU with Iran’s finance ministry, and plans to extend financial support in Cuba. Credit guarantees for cultural content businesses will be expanded to increase exports of “Hallyu,” while 300 billion won will be allocated to ensure exporters of services.
It also announced plans to expand overseas investment insurance to cover collective investment vehicles such as overseas infra funds. It aims at helping Korean businesses seeking to participate in infrastructure development in emerging countries, following the launch of the Asia Infrastructure Investment Bank (AIIB).