Park envisions venture boom
3-year plan targets more FTAs, research funds
By Na Jeong-ju
The government will inject 4 trillion won ($3.74 billion) over the next three years into startups and provide them with tax benefits to trigger a “venture boom” and help create more companies such as NHN and NCsoft.
The administration will set up funds jointly with private investors to finance research projects and help in overseas stock market listing, while striving to sign free trade agreements (FTAs) with China, Canada, Australia, New Zealand and Vietnam, among others.
Korea has signed FTAs with 46 countries, including the United States and 26 countries of the European Union, which account for 55 percent of global GDP. The figure will rise to 70 percent by 2017.
These highlight the Park Geun-hye administration’s three-year “economic innovation” plan, unveiled Tuesday.
“The economy is now facing a crucial turning point. Depending on which path we take, we can leap forward or fall behind,” Park said in a nationally-televised address.
“”We must reactivate the dying growth engine or there will be no future for us,” Park said.
The plan resembles five-year development projects undertaken by Park’s father, the late former President Park Chung-hee, in the 1960s and ‘70s, which fueled rapid economic growth.
“If this plan is implemented successfully, Korea’s potential growth will reach 4 percent and the employment rate will rise to 70 percent. This will form the basis of a country with more than $40,000 in per capita income,” Park said.
She has set a goal of creating 500,000 jobs for young adults and 1.5 million jobs for women by boosting trilateral cooperation among government, industry and colleges.
The services sector will also get a major boost through deregulation.
The government designated health, education, tourism, finance and software industries as future growth engines, which will benefit from deregulation and “swift and tailored” support.
The government will apply a “cap” on the total number of regulations by obliging itself to ease or eliminate existing regulations when introducing new ones, a measure aimed at preventing the regulatory system from getting too complicated for businesses.
It will also introduce a “negative regulatory system,” under which all regulations are removed except for specifically listed cases.
The government plans to reform pension programs for civil servants, soldiers and teachers from private schools. It has spent a huge amount of taxpayers’ money to pay pensions to retired public servants and soldiers since the pension reserves for them were depleted in 1977 and 2001, respectively. The pension for private school teachers is also scheduled to run out by 2033.