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.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to