Major projects under the "Korean New Deal," which the Moon Jae-in administration pushed with a pledge to invest 220 trillion won ($158 billion) by 2025, have been scaled back or halted one after another without meeting their original targets. Large amounts of public money were poured in over a short period under the banner of overcoming the COVID-19 crisis and driving a digital and green transition, but some projects ran into weak demand, poor results and overlapping functions with existing programs.
The Ministry of SMEs and Startups will stop creating new "Green Startup Towns," according to the government and industry sources on the 28th. Once construction now under way in Busan and Jinju, South Gyeongsang Province, wraps up next year, the ministry plans to provide no further budget support and to select no additional regions.
Green Startup Town began in 2020 as a flagship regional startup project in the green New Deal portion of the Korean New Deal. It was modeled on London's King's Cross, a successful case of British urban regeneration. Six sites nationwide were selected, starting with Cheonan, South Chungcheong Province, followed by Gwangju, Daegu, Wonju, Busan and Jinju. The ministry concluded that the program overlaps in function with the existing "Startup Park" initiative and decided to end it after next year. No additional budget support beyond local funding is expected.
Other ministries' New Deal projects have also strayed far from their original blueprints. The Ministry of Health and Welfare's "smart hospital leading model development," the Ministry of Trade, Industry and Energy's (now the Ministry of Trade and Industry) "home smart power platform," and the Ministry of Environment's (now the Ministry of Climate, Energy and Environment) "smart green city" and Gwangju "clean air industrial cluster" have all been scaled back or suspended because of poor results, weak demand, delays and feasibility problems.
Hong Jong-ho, dean of the Graduate School of Environmental Studies at Seoul National University and a former president of the Korean Association of Public Finance, said, "In our country, the problem of weak continuity in the previous government's projects has recurred every time power changes hands." Hong added, "Rather than uniformly halting projects simply because a previous government pushed them, we should weigh their results and effectiveness and distinguish between projects to continue and those to wind down." Hong also said, "At the time of the Moon Jae-in administration, green New Deal policy was still at an early stage, so there were aspects in which the specificity and effectiveness of the project plans were not sufficient." Hong continued, "The current government needs to secure policy continuity by supplementing and developing policies whose results have been confirmed, based on the experience accumulated so far." ▷See Page 3
