(Unofficial Translation)

“Economic security” is the key topic of the rapidly changing international economic order. Trade tensions and competition to achieve technological supremacy are intensifying with the strengthening of state-centered nationalism. Major countries around the world are competing in earnest to reorganize global supply chains in ways that prioritize their own needs. Many governments are increasingly restricting exports for security reasons, and technology and natural resources are being weaponized, thereby shaking the foundation of the reciprocal international division of labor and peaceful free trade order. All of these are definitely posing grave threats to us as we are pursuing an export-driven open economy based on free trade. 

With the economy and security now becoming inseparable, we are living in an era when economic security equals national security and national competitiveness. The Government should make diplomatic efforts to enhance international solidarity and cooperation in order to restore a fair and free international trade order. At the same time, we must continue to protect our economic sovereignty and national interests by facing up to the sobering reality of the global economy and politics. 

My Administration has proactively responded to changes in the international order that are closely intertwined with the economy and security. The National Security Council’s standing committee began including members from the economic sector last year. This Economic and Security Strategy Meeting on International Issues was created to allow ministries and agencies related to the economy and security to cope with pending matters by forming one team and putting their heads together.

Today’s meeting has been convened to discuss strategies to respond to the crises in global supply chains and Ukraine, both of which have become urgent challenges to the international economy. Since these challenges are tied to very important situations that could become volatile at any moment, I have come here to preside as President. 

Managing global supply chains is essential, considering how heavily dependent our economic structure is on manufacturing and trade. In particular, the recent increase in global supply chain risks makes a government-wide rapid response more imperative from economic and security perspectives.

To date, our economy – with a focus on efficiency – has developed on the foundation of trust in free trade and a timely supply system. However, it has become urgent to switch to a supply system that prioritizes stability in order to preemptively brace for ever-deepening related risks. We must seize this global supply chain crisis, which the world must endure together, as an opportunity to strengthen our economic fundamentals and industrial competitiveness. If we draw upon our excellent manufacturing production base, outstanding innovation capabilities and flexibility in responding to crises, we will be able to make better use of our strengths with regard to supply chains.

We have created opportunities by bravely facing up to supply chain crises through government-wide responses and public-private cooperation. By paving the way for materials, parts and equipment self-sufficiency, we have significantly reduced our dependence on Japan for key parts in defiance of its export restrictions. In addition, our country has emerged as the world’s 5th largest producer of automobiles – we were the 7th – in the course of swiftly responding to disruptions in the supply of auto parts. Last year, the urea water crisis was quickly overcome as well.

Meanwhile, we have also laid the legal foundation to protect our economic security. In 2019, the Act on Special Measures for the Promotion of Specialized Enterprises for Materials and Components was enacted, and the Special Act on the Promotion of Advanced Industries was enacted early this year to establish a legal basis for preemptively responding to supply chain-related risks.

Now is the time to build on what has been achieved and establish a more advanced, all-encompassing response system. The key is to establish a pan-government management system for all supply chains, going beyond management based on industry-specific responses. To this end, enacting the Framework Act on the Supply Chain Management for Economic Security has become very urgent for an institutional foundation. This is about creating a complete legal system for comprehensive management – from high-tech industries to general-purpose products.

The Presidential Committee on Economic Security and Supply Chain Management will be established as a control tower, and a Supply Chain Stabilization Fund will be introduced to provide financial assistance. An institutional foundation for the designation of economic security-related items and the operation of an early warning system should also be devised.

We must work to strengthen state-backed financial support for supply chain stabilization and increase the number and size of stockpile of items. Bilateral and multilateral supply chain cooperation has to be reinforced as well.

As uncertainty is rising – with no sign of breakthrough in the Ukraine situation – urgent preparations are needed. The Government issued a travel ban as a precautionary measure to brace for a sudden worsening of the situation. If it comes to it, we will have to do all we can to ensure the safe evacuation and withdrawal of our people and devise measures in advance to minimize the damage to Korean businesses.

I also ask you to bolster efforts to reduce uncertainty in the nation’s real economy and financial market. Measures that can be taken right away must be executed immediately, and we should carefully prepare for the worst case scenario. In addition to providing all-encompassing support for exporters and Korean businesses present in Ukraine, we must preemptively cope with instability in the supply and demand of energy, raw materials and grain. I would like you to meticulously review supply and demand stabilization plans, market stabilization measures and other contingency plans and devise thorough countermeasures for potential risks in each field.

Responsibility for managing the economy and national security extends beyond one presidential term. I ask the economy and security teams to cooperate for a watertight response to the rapidly changing global economic and security environment and do everything possible until the end of my Administration for a steadfast economic leap forward.