(Unofficial Translation)

Fellow Koreans, the Honorable Speaker and distinguished members of the National Assembly, 

In this very grave situation in and outside the country caused by COVID-19, I stand before the National Assembly and the people with extraordinary determination and a heavy heart to explain the Government’s budget proposal for fiscal year 2021.

No one could have expected this situation just a year ago. This year, 2020, will be recorded as a year of global upheavals. The COVID-19 pandemic is immensely threatening human lives, upending daily routines and bringing about tremendous changes in the world economy and international order.

A novel virus has plunged humanity into its worst health crisis in 100 years. The number of confirmed COVID-19 cases worldwide has already surpassed 43 million, with over 1.1 million fatalities. Even today, hundreds of thousands of confirmed cases and thousands of deaths are still being reported. There is no end in sight to the pandemic.

We are also experiencing the loss of daily routines. Transnational movements and people-to-people exchanges have been brought to a halt, and we are rapidly transitioning to a contact-free society. With the bedrock of economic activities falling apart, the global economy has sunk into the quagmire of recession. This is the worst economic crisis facing humanity since the Great Depression. This unprecedented multi-crisis – with the real economy, finance, domestic demand and exports all hit hard simultaneously – is driving the world economy to the brink. Businesses are finding it increasingly difficult, and employment instability is worsening. The lives of vulnerable populations have become even harder. No part of the world has been unaffected. Since the modern age, we have never experienced a situation when the entire world is faced with an economic crisis due to an infectious disease. 

Amid such a situation, however, the Republic of Korea is proving itself to the world as a country with strong resilience in the face of crisis. In the process of overcoming COVID-19, we have come closer together than at any time before and generated hope despite the crisis. We are becoming the most successful country in terms of managing both the economy and epidemic prevention and control. All of the credit should go to the great people of Korea who, especially in a time of crisis, unite more firmly and pool their strengths. More than anything else, the rediscovery of the Republic of Korea amid the global crisis has instilled the people with great courage and a sense of pride.

Korea’s response to COVID-19 has become a model for the whole world and the pride of the Republic of Korea. “Openness,” “transparency,” and “democracy,” the core values of democratic countries, have served as the three principles of epidemic prevention and control. All of the people have become the principal agents in our pandemic response efforts. We have clearly demonstrated the unmatched excellence of Korea’s response to COVID-19 – rapid diagnostic testing, thorough epidemiological investigations and swift quarantining and treatment.

It involved neither chance nor luck. In the early stages of the COVID-19 outbreak, Korea was once the country with the world’s second largest number of confirmed cases. Since then, there have been several COVID-19 resurgence crises, but whenever they have arisen, we have successfully surmounted them. By effectively getting past the resurgence crisis of August and the critical point around the Chuseok break, we have managed to control COVID-19 in an orderly manner. While Europe and the rest of the world are seeing the resurgence of COVID19 and taking emergency measures, Korea is faring exceptionally well – to the extent that we are conversely easing epidemic prevention and control restrictions. All of this has been made possible thanks to the dedication of disease-control authorities and medical professionals. It has been made possible thanks to the people who have joined forces behind epidemic prevention and control efforts while enduring economic damage and inconveniences in their daily lives. With profound reverence, I extend my deepest gratitude. 

On the economic front, Korea is also drawing global attention for its miraculous performance. Korea’s successful response to COVID-19 – without border closures or regional lockdowns – has led to our success with the economy. Backed by effective economic countermeasures such as the Government’s aggressive fiscal policy and the Korean New Deal initiative, Korea is seen as the country that is reviving its economy faster than any other nation. We are also projected to register the highest economic growth rate among the OECD member states. International credit rating agencies uniformly forecast Korea’s sovereign ratings as stable, showing a high degree of trust in the Korean economy. The world’s three major credit rating agencies – Standard & Poor’s, Moody’s and Fitch – have downgraded as many as 109 countries’ sovereign credit rating or outlook this year. Compared with those countries, ours is a very fortunate achievement, indeed.

I would like to take this opportunity to thank the National Assembly for its cooperation in surmounting the economic crisis. The Assembly’s swift passage of this year’s four supplementary budget proposals, amounting to 67 trillion won, has become a great source of strength for safeguarding the economy and the people’s lives. Cooperative governance is a driving force to overcome national crises. I ask you to continue to attend to the struggling economy and people’s livelihoods. 

Fellow Koreans and distinguished members of the National Assembly, 

Now is the time for us to bring about obvious stability in epidemic prevention and control and, at the same time, to achieve a clear economic rebound. I hope that today’s gathering will serve as an opportunity to renew our determination to catch two rabbits – success with both the economy and epidemic prevention and control – no matter what. 

The Government will meticulously maintain an advanced and systematic epidemic prevention and control mechanism. If we continue to keep our mature civic awareness by making compliance with epidemic prevention guidelines a part of the new normal with COVID-19 – just as we have done so far – the Republic of Korea’s stature as a leading country at the forefront of epidemic prevention and control will not change. 

We will ensure that the economy will also make a firm turnaround. Hope is beginning to take shape. After wading through the swamp of reverse growth in the first two quarters, our economy has finally sprung back to positive growth in the third quarter. It is very regrettable that the painful resurgence of COVID-19 in August thwarted an even greater rebound. However, what we achieved is all the more significant since it was made in the course of such devastation. 

We will work to extend this upward economic trend even into the fourth quarter by further nurturing the hope generated in the last quarter. Exports are picking up, and conditions for reviving consumer spending and domestic demand are being put in place thanks to downgraded epidemic prevention restrictions. In the third quarter, we also attracted the country’s largest foreign direct investment ever, attesting to Korea being globally recognized as a safe investment destination. Corporate earnings are also gradually improving. In particular, the fact that new industries and small to mid-sized innovative business ventures are leading the economic recovery shows the potential of our economy that turns crises into opportunities. 

Starting from next year, we have to implement full-fledged economic revitalization measures in order to put our economy back on a normal growth trajectory. The Government will step up efforts to help Korea play a leading role in the future while overcoming crises by making a stronger push for the Korean New Deal. We will become a reliable Government that looks after the people’s everyday lives and takes responsibility for the nation’s future. We will absolutely reciprocate the hard work of our people, who are serving as the principal actors in anti-epidemic and economic efforts while enduring many hardships. We will lead the world by succeeding in both of these efforts and by turning crises into opportunities. I call upon the National Assembly to join forces with us as well.

Fellow Koreans and distinguished members of the National Assembly, 

In order to safeguard the people’s livelihoods and usher in the country’s future, fiscal spending has taken on an even greater role. The Government has drawn up a 555.8 trillion won budget for next year, reflecting its intent to steer the country out of the national crisis and make it a pacesetter. This is an expansionary budget – an 8.5 percent increase from this year’s original budget – but if the supplementary budgets are included, the increase is equivalent to 0.2 percent. As such, we have taken into account mid- to long-term fiscal soundness as well. The Government will actively inject fiscal resources while simultaneously conducting a painstaking reallocation of spending. We will never neglect efforts to maintain fiscal soundness. 

The 2021 budget proposal presented by the Government is the budget that Korea needs to move beyond the era of crises and leap forward to become a leading nation. The top priority has been placed on resuscitating the people’s livelihoods by surmounting the crisis at an early date and achieving a fast and strong economic recovery. Moreover, emphasis has been placed on full-out implementation of the Korean New Deal with the aim of a great transformation for our economy from fast follower to pacesetter. We have increased investments to secure future growth engines and expand employment and social safety nets, thereby steadfastly backing policies for innovation and inclusiveness. We have also fully reflected our resolve to ensure secure everyday lives for our people, a robust national defense and peace on the Korean Peninsula.

In 2021, as a reliable Government protecting the people’s livelihoods, we will swiftly surmount the crisis by reinforcing the role of fiscal spending and will help the country become a leading nation. 

First, above all else, we will prioritize fast and strong economic recovery. It is our determination to accelerate economic recovery by rapidly departing from COVID-19’s economic impact and to make a clear economic rebound.

Jobs are the starting point. We saw jobs recover markedly last year, but they were hit hard again amid the COVID-19 crisis this year. In order to protect employment, the Government has significantly expanded emergency fiscal and financial support and taken desperate measures by creating public sector jobs. As a result, employment indicators have shown gradual improvement, but job losses have again increased in the face of the COVID-19 resurgence crisis in August. Next year again, jobs will be the biggest pending issue for the people’s livelihoods and the starting point for economic recovery.

Therefore, next year’s budget has prioritized the maintenance and creation of jobs. The Government will focus on creating new jobs while further strengthening our efforts to protect the existing ones. We will protect 460,000 jobs through subsidies to help businesses maintain employment and help create 570,000 private-sector jobs through customized support for young people, the middle-aged and elderly and microbusiness owners. For the elderly, those with disabilities and other vulnerable people, the Government will offer 1.03 million jobs directly to help ease the employment shock caused by COVID-19. Businesses play a crucial role in creating quality jobs. Government investment is pump priming for private-sector job creation. I ask businesses to pull together to maintain and create jobs. The Government will do its utmost to provide support.

In order to accelerate economic recovery, consumption must increase and investment and exports must be reinvigorated. The Government will earnestly implement policies to boost consumption based on confidence in our COVID-19 prevention and control. We will expand the issuance of gift certificates redeemable in designated local areas and traditional markets to 18 trillion won, strengthen support for small businesses in residential neighborhoods and stimulate consumption. We will not spare any support to revitalize local economies and boost domestic tourism, which has shrunk due to COVID-19.

We will also play an active role in reinvigorating investments. The Government will inject 72.9 trillion won to back up policies, so abundant liquidity can be converted into productive investments. Korean New Deal funds and financing will play a role in promoting private-sector investments. We will double last year’s support for the reshoring of Korean companies and attracting high-tech industries from overseas. We will speed up investments in large-scale projects for balanced national development and expand investments for building neighborhood infrastructure in local areas to 11.1 trillion won.

We will also make all-out efforts to facilitate the recovery of our exports. Amid the COVID-19 crisis, exports are propping up our economic rebound. We are seeing sharp increases in exports of products associated with Korea’s response to COVID-9 and promising goods needed for contact-free living – which have been mainly led by SMEs – as well as cultural content and our signature items such as automobiles and semiconductors. We will accelerate this pace further. 

We will supply an additional 5.8 trillion won for trade financing to support SMEs’ exports and domestic builders’ overseas orders for plants. In addition, support for the diversification of export markets will also be increased. I look forward to all economic players – large businesses, SMEs, labor and management, the Government and the private sector – joining forces to facilitate the economic rebound.

Second, we will vigorously push ahead with the Korean New Deal for the future of the Republic of Korea. When the going is tough, envisioning the future is all the more necessary. The Korean New Deal is a grand project to transform the nation into a leading country. A total of 160 trillion won will be injected into this national development strategy. Next year, we will invest a total of 32.5 trillion won, including 21.3 trillion won from state coffers, to create 360,000 jobs.  

First of all, we will invest 7.9 trillion won in the Digital New Deal. Recently, Korea ranked first in the OECD Digital Government Index. According to the IMD World Digital Competitiveness Ranking, our country’s digital competitiveness has also continued to rise, from 19th in 2017 to 8th this year. It is a remarkable advancement. For Korea, which has great strengths in the digital field, the post-COVID-19 era will be a golden opportunity to emerge as a leading country.

Next year, we will invest heavily in building data dams for the collection, processing and utilization of data as well as in fostering contact-free industries related to such fields as education and medical services. We will also inject 1.9 trillion won into digitalizing key infrastructure, for instance, by expanding the installation of an intelligent transportation system to cover 50 percent of national highways throughout the country as well as systems to automate water-level measurements at rivers and dams and to remotely control floodgates. This will also contribute greatly to disaster prevention and management.

We will invest 8 trillion won in the Green New Deal. The Government has been strongly pushing energy transition policies to date, but much more has to be done. Together with the international community, as part of the efforts to actively respond to climate change, we will strive to become carbon-neutral by 2050.

We will create new markets and industries as well as job opportunities by replacing coal-fired power generation with renewable energies. The Government will invest 2.4 trillion won to replace public rental complexes and other dilapidated buildings with eco-friendly facilities and pursue a “green transformation” of urban spaces and the infrastructure linked to day-to-day living.

The supply of electric and hydrogen-fueled vehicles will also be expanded to reach 116,000, and we will inject 4.3 trillion won into the construction of additional hydrogen fueling stations and EV rapid chargers. We will build smart industrial complexes that are low-carbon and green and expand financial support for renewable energy projects in local areas. 

The Korean New Deal is a people-centered development strategy. We will invest 5.4 trillion won to strengthen safety nets and nurture talented individuals – the cornerstone of the Korean New Deal. We will inject 4.7 trillion won to expand employment and social safety nets by, among other things, increasing employment insurance support for the contract-based self-employed and getting rid of the family support obligation criteria for living allowances. In line with the changing socio-economic structure, we will strengthen human resources development and vocational training systems as well as steadily increase investments in people to narrow the digital divide.

Meanwhile, we will actively proceed with the Regionally Balanced New Deal.
By making the Regionally Balanced New Deal another of the Korean New Deal’s fundamental spirits – along with the digital, green and safety net plans – we will dynamically transform the Republic of Korea, starting with local areas. The Government has so far vigorously pushed ahead with policies for balanced national development: the relevant projects, neighborhood infrastructure in provincial areas, innovative cities and special regulation-free zones.

However, the gap between the Seoul metropolitan area and local areas has scarcely narrowed. The Regionally Balanced New Deal will give further impetus to the balanced national development policy that we have implemented so far and improve its quality. Local areas will be the centers for the Korean New Deal, allowing everyone to feel changes in their everyday lives. Smart cities, green smart schools, green remodeling, smart green industrial complexes and other representative projects of the Korean New Deal will revolutionize our living spaces and workplaces in the post-COVID-19 era.

If local areas show initiative by identifying and pushing projects in a creative manner, the Government will provide all the support available. When it comes to balanced national development, there is no separation between the ruling and opposition parties. I promise that the Government will actively support it if the National Assembly pools its wisdom for the Regionally Balanced New Deal.

Third, we will make bold investments in future growth engines. Over the past three and a half years, we have given impetus to identifying our future income sources in the course of accelerating innovative growth. On the foundation of our standing as the world’s No. 1 semiconductor producer, we are moving forward toward next-generation industries, such as system and artificial intelligence semiconductors, accomplishing our dream of becoming a comprehensive semiconductor powerhouse. Future cars are also emerging as new export engines. Despite adverse conditions caused by COVID-19, exports of future cars – electric and hydrogen-fueled automobiles – increased more than 78 percent and 46 percent, respectively, in the first nine months of 2020 year on year. Domestic businesses are taking the lead in the global market for electric vehicle batteries. In addition, K-bio’s status is rising tremendously amid the COVID-19 pandemic, and the biohealth sector is becoming our country’s new strong suit. 

The Government will further speed up this pace. We will invest 4 trillion won in three new industries – system semiconductors, future cars and biohealth – to strengthen our country’s future industrial competitiveness. We will also inject 3.1 trillion won in the data, network and artificial intelligence sectors, which constitute the Fourth Industrial Revolution’s core foundations. In addition, a total of 5.5 trillion won will be invested in further strengthening the competitiveness of manufacturing and other conventional flagship industries. By further expanding our support for the key materials, parts and equipment industries, we will help our businesses move beyond Japan to reach every corner of the world. We will increase our assistance for items long-reliant on imports from Japan, expanding it from the original 100 items targeted to cover 338 items linked to many other countries around the world. In doing so, we will strive to emerge as a materials, parts and equipment powerhouse. 

We will also focus our efforts on sharpening the competitive edge of local areas’ flagship manufacturing industry. We will actively push the “smartization” of industrial complexes and major renovations at outdated industrial complexes while spurring SMEs’ smartization. 

Meanwhile, we will concentrate on building the foundation for an innovative ecosystem. A total of 29.6 trillion won will be invested in related support – a large increase from this year. We will strengthen R&D investment in high-tech areas to develop key original technologies and actively nurture experts in digital fields. We will intensively supply new industries and business ventures with innovative venture funds and expand public procurement to help innovative products secure an initial consumer base. To spur startups and business ventures, we will spread the achievements from regulatory sandboxes and special regulation-free zones further. 

Fourth, we will further expand and solidify employment and social safety nets. From its earliest days, my Administration has significantly strengthened the social safety net for the vulnerable by raising the basic pension for the elderly, providing monthly child benefits, introducing a system in which the Government takes responsibility for dementia patients, expanding national health insurance coverage and increasing the Earned Income Tax Credit. Amid the COVID-19 crisis, we have done all we could to stabilize employment and support the vulnerable. We have mobilized unprecedented policy measures across the board, for instance, by providing emergency relief payments, employment stability subsidies and new hope funds for microbusiness owners as well as increasing the number eligible for basic living security benefits. As a result, all income quintile groups saw their incomes rise in the second quarter, and the incomes of lower quintiles increased even faster than those of the others, which led to an improved distribution index – a desirable phenomenon. This is a valuable achievement. 

However, there is still a long way to go. We will look after the lives of each and every person more warm-heartedly so that this does not end up as a transient phenomenon fueled by government subsidies. Immediately from next year, we will start to inject 46.9 trillion won to make the social safety net tighter in four major categories: livelihoods, medical care, housing and education. 

The Government will abolish the family support obligation criteria for living allowances, so an additional 157,000 households can receive benefits. We will expand the scope of recipients for the monthly basic pension of 300,000 won to all seniors eligible in order to provide them supplemental income in their later years. 

We will raise national subsidies to 11 trillion won to expand national health insurance coverage and that of long-term care insurance for the elderly. We will supply an additional 190,000 public rental housing units to ease the housing burden for low-income households. Moreover, free education will be expanded to all high school grades to make high school education entirely free.  

The Government will redouble its efforts to protect the vulnerable and invest in people. We will further strengthen lending, loan guarantees and other financial assistance for those SMEs, microbusiness owners and the self-employed in need. We will also strengthen support for stable living conditions, including jobs for young adults and housing. We will redouble our assistance for farmers, fishermen, the relatives of national merit recipients and people with disabilities by, for instance, expanding pension payments for aged farmers, introducing a subsidy system for fisheries to promote the public good, raising compensation for patriots and veterans and increasing pensions for those with disabilities.   

In particular, we have allocated 20 trillion won of the proposed budget to establish the foundation for an employment safety net for the entire public as a major project. The employment support program, which will be implemented for the first time this coming January, will provide a total of 400,000 people with related services and a 500,000 won monthly allowance to facilitate employment. The Government will begin covering 80 percent of the employment insurance premiums for low-income artists and 465,000 contract-based self-employed workers. 

We will also make special efforts to stabilize housing for the people. The Government is firmly committed to stabilizing the real estate market, protecting genuine would-be homeowners and curbing speculation. We will push ahead with the planned housing supply expansion and do all we can to promote the residential welfare of both newlyweds and young adults. We will help the three revisions to the Housing Lease Protection Act quickly take root and stabilize the key money-based housing rental market without fail by supplying quality, midsize public rental apartments.           

Lastly, the budget proposal contains our unwavering commitment to ensuring secure lives for the people, a strong national defense and peace. Since its launch, my Administration has pushed ahead with three projects to protect lives by reducing traffic accidents, industrial accident-related deaths and suicides. We have responded on multifaceted fronts to protect the people’s health from fine dust, including the establishment of a special act. As a result, traffic accidents and industrial-accident related deaths have seen their numbers fall sharply since the start of 2019, and we have achieved a continuous decline in the density of fine dust. We will make more efforts next year as well. 

The epidemic prevention and control measures against COVID-19 and the strengthening of our system for responding to infectious diseases are very important tasks for next year as well. The funds earmarked for Korea’s response to COVID-19 has been greatly increased to 1.8 trillion won. The full-cycle epidemic prevention and control system, ranging from prevention to diagnosis to treatment, will be strengthened. We will build 500 treatment facilities solely for respiratory ailments in addition to establishing three new hospitals specialized in infectious diseases. 

Since the development of vaccines and treatments is of paramount importance, we will expand customized support for each stage of clinical trials during development. Even if other countries develop treatments and vaccines ahead of us and imports become available, we are determined to see to it that domestic companies eventually succeed on their own to accumulate development experience, gain sovereign control over vaccines and lower the supply price. The proposed budget also includes funding for the first time for one hundred professional counselors to help COVID-19 patients and medical workers manage their mental health. Korea’s response to COVID-19 has already become a global standard, and we will back its success all the more strongly. 

It is the Government’s unchanging philosophy that strong national defense constitutes the foundation of peace. With a strong commitment for peace on the Korean Peninsula, the Government has expanded the defense budget to 52.9 trillion won by further increasing investment in defense, which is the last bastion of national security. We will reinforce our state-of-the-art combat strength in preparation for security threats from all directions and intensively invest in developing core technologies and localizing the production of related parts. To strengthen combat capabilities, we plan to significantly increase investment to foster smart military capabilities, for instance, by providing individual soldiers with state-of-the-art equipment and science-incorporating training that utilizes virtual and augmented reality. Meanwhile, we have allocated 3.8 trillion won to improve the treatment of soldiers through pay increases and other means.

The last three and a half years was a period to eliminate the risk of war on the Korean Peninsula as well as a challenging time to transition to a peaceful and prosperous Korean Peninsula. There was much progress, but the dialogue was suspended again, and the people are very concerned due to the recent death of a Korean national in the West Sea. The Government will transparently reveal the truth and fulfill its responsibility, but this incident also serves as one more reminder of the urgent need for a peace regime.

Across our shared territory, seas and sky, peace is a “path for coexistence” for both South and North Korea. It is my earnest wish that the two Koreas find a way to coexist as a community of life and safety to overcome disasters, catastrophes and diseases that infect people and animals. This era calls for us to establish peace on the Korean Peninsula. Even if it takes time, we should move toward peace without fail while overcoming the obstacles ahead of us one by one. Building upon strong national defense, we will continuously seek dialogue for denuclearization and permanent peace on the Korean Peninsula. I hope that the South, North and international community will surmount obstacles through dialogue and trust so that peace can be expanded from the Peninsula to Northeast Asia. 

Fellow Koreans, the Honorable Speaker and distinguished members of the National Assembly,  

Our National Assembly has demonstrated its strength through the tradition of cooperating in times of crisis. Cooperative governance is all the more urgent amid an unprecedented crisis like this one. The people hope that the ruling and opposition parties will engage in bipartisan cooperation to prevail over the national crisis while fiercely competing with each other. When we meet their demands for livelihoods and reform, the outcome of cooperative governance will shine even more brightly. 

I ask the National Assembly to cooperate and pass the three fair economy-related bills: the revisions to the Commercial Act and the Monopoly Regulation and Fair Trade Act and the new law concerning supervision of financial groups. I also ask you to produce results by passing the bills for reforming law enforcement agencies, such as the Police Act and the National Intelligence Service Act. I hope that you will now stop delaying the launch of the Corruption Investigation Office for High-ranking Officials. It represents the people’s desire for no one to be immune from criminal investigations and for law enforcement agencies to be reformed. I urge you to pass as soon as possible the stack of pending bills related to people’s livelihoods – the Distribution Industry Development Act, the Act on the Protection of and Support for Micro Enterprises, the Employment Insurance Act, the Infectious Disease Control and Prevention Act to surmount COVID-19. I hope that the National Assembly will demonstrate its true nature by working for the people’s livelihoods and passing the 2021 budget proposal by the legal deadline. 

In particular, I ask the National Assembly to act on behalf of the socially vulnerable. The socioeconomic crisis caused by infectious diseases is not equal for everyone. Disasters descend upon the weak first and are harsher on them, but the reality is that our society has not fully established safety nets for the weak and needy. I would like the National Assembly to pool its wisdom as well to devise sustainable measures for those who are not protected institutionally.  

I believe that our efforts to move toward “a country where everyone prospers together” will begin here in the National Assembly, the hall of the people’s will. “The Republic of Korea, a country resilient to crisis” is a nation where people cooperate with each other in solidarity. Let us move toward a Republic of Korea where people join forces to overcome national crises and play a leading role in the world. 

Thank you.