South Korea is to make artificial intelligence (AI) and wireless communications centerpieces of what it is touting as a “New Deal” to create jobs and boost growth after the COVID-19 pandemic subsides.
The government, in a statement yesterday, said that it would promote AI and 5G wireless technology to support the economy once the virus is brought under control.
The statement said that funding would come from a third emergency budget being drafted now and from annual budgets through 2022, but did not specify the amount.
South Korean President Moon Jae-in, after last month’s big election victory, said that his government would pursue large-scale state projects to boost jobs and innovation in the post-virus era.
He compared his vision to the New Deal launched by former US president Franklin Roosevelt in the 1930s to help the US recover from the Great Depression.
Economist Kim Jung-sik at Seoul’s Yonsei University said that Moon’s plan was designed to help support newer, Internet-based businesses, but probably would not involve the kind of spending that the term New Deal would seem to imply.
“It’s different from the traditional New Deal which seeks massive jobs with massive spending,” he said. “South Korea’s financial ammunition is increasingly limited after a series of spending measures to stimulate the economy.”
The project comes as South Korea’s trade-dependent economy braces for more fallout from the pandemic.
Even though the country has so far managed to bring its own outbreak under control, March was its worst month for job losses since the global financial crisis, with part-time workers and young people among the hardest-hit.
As part of its New Deal, South Korea plans to create a fund to support AI development, build sites for robot testing and help businesses launch new services that make use of data, the statement said.
The government would also support construction of a nationwide 5G network, it said.
The goal is to enhance South Korea’s economic growth potential and create sustainable jobs for future generations, the government said, adding that more specifics would be announced next month.
“The New Deal is essentially an industrial growth strategy with jobs as a priority,” Korea Development Institute economist Joseph Han said. “It could be a stepping stone for young people struggling to get more than temporary, short-term employment.”
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