(Unofficial translation)

Let me begin the 11th Cabinet Meeting.

I’ve returned from recent visits to three ASEAN member states as my first overseas tour of the year. Brunei, Malaysia and Cambodia are all important cooperation partners for the New Southern Policy. This policy is at the center of my Administration’s national development strategies. Diversifying diplomacy and the economy in line with national development is a must, not an option. ASEAN’s growth is faster than that of any other region in the world, and its future growth potential is also tremendous. In this context, ASEAN can be said to be our future. Together with ASEAN, we have to usher in a future of peace and shared prosperity in Asia.

For their part, ASEAN member states positively support our New Southern Policy and hope to expand cooperation. All three nations I recently visited were keen to fuse our New Southern Policy and their respective national development strategies. We agreed with Brunei to strengthen energy cooperation and the system for processing infrastructure project orders. With Malaysia, we reached an agreement to jointly enter the global halal market, valued at US$2 trillion, by combining the appeal of our Hallyu (the Korean Wave) and Malaysia’s strength in halal. In addition, our two countries agreed to expand trade and investment by concluding a Korea-Malaysia FTA separate from the existing Korea-ASEAN FTA. Cambodia, where Korea is the second largest inbound investor, is expected to serve as a pivotal link in expanding not only bilateral relations but also Korea’s cooperation with all ASEAN members and with those states along the Mekong River. I look forward to my recent tour serving as a catalyst for expanding the market scope of Korean businesses and diversifying trade markets. 

On another front, I was able to reaffirm ASEAN’s steadfast support and commitment to cooperation in regard to the peace process on the Korean Peninsula. As ASEAN member states have long maintained diplomatic ties with North Korea, they will be conducive to our endeavors for peace on the Peninsula.

A peaceful and prosperous Korean Peninsula as well as a new economic map for the Peninsula will be completed in tandem with the New Northern Policy and New Southern Policy. I urge all related ministries and agencies to do their utmost to identify substantive, concrete projects based on the achievements made during my recent overseas tour and to produce tangible results. In particular, I request that you make thorough preparations for the ASEAN-Republic of Korea Commemorative Summit in November and the inaugural Korea-Mekong summit to ensure that both summits serve as an opportunity to enhance our New Southern Policy and significantly upgrade our relations with countries in the Mekong region and with all ASEAN member states. 

Amid the bleak global economic outlook this year, our highly trade-dependent economy is being greatly affected. Despite this situation, however, it is fortunate that our economy is showing signs of improvement in various aspects this year. As far as industrial activities are concerned, production, consumption and investment have all increased, and the economic sentiment indexes have also improved. Venture investments and the number of newly founded businesses have been on a steady rise, and the number of employed people in February this year increased by 263,000 year on year, the largest hike since January last year. The nation's economy remains robust with inflation being kept under control and the credit default swap (CDS) premium index, which measures the risk of a sovereign default, at its lowest level in 11 years and three months.

However, manufacturing, a mainstay of the nation's economy, is still facing a tough situation. My Administration has come up with manufacturing-related measures on several occasions so far and is now providing support to innovate manufacturing through various policy instruments, such as regulatory sandboxes and others pertinent to smart factories. Still, local manufacturers have yet to fully sense the positive impacts. In particular, the nation's long-established flagship industries continue to suffer an employment slump, which constitutes the toughest challenge for our economy.    

With the global economy slowing down, the manufacturing sector is facing a difficult situation worldwide. Still, we just can’t blame external factors. The problem is that the competitiveness of Korea’s manufacturing industry is stagnating. To revitalize manufacturing is to revive the Korean economy. The Government will do its utmost to help boost the vitality of manufacturing.  

For Korea’s major manufacturing industries, I ask you to examine whether the sector-specific measures introduced last year have been implemented as planned. Korea’s shipbuilding industry regained the No. 1 spot in global market share last year, and in February this year, Korean shipbuilders won 81 percent of global orders, showing signs of recovery. I urge you to provide assistance so that these gains in shipbuilding orders will lead to quick improvement in employment. I also ask you to more actively work out measures to support the small and mid-sized shipbuilders that are still having a hard time winning orders. In particular, I request that definite measures be taken so that Hyundai Heavy Industries’ planned acquisition of Daewoo Shipbuilding and Marine Engineering will not cause employment instability there.

Despite auto industry exports increasing in January and February, parts and component makers continue to face difficulties. I ask you to strive to ensure that electric and hydrogen-powered cars and other eco-friendly vehicles are distributed more swiftly and to promptly implement the measures announced at the end of last year to support the auto parts industry. I’d like to see measures quickly arranged to raise the competitiveness of the non-memory semiconductor field, which is relatively less competitive than the memory semiconductor sector, to ease memory semiconductor’s lopsided dominance. 

I urge you to make policy efforts to promote development strategies for future manufacturing industries, including robots, bio-engineering, health, materials, components, equipment and 5G-related fields, so that the innovation of our long-established flagship industries and the development of new industries can be achieved in a balanced manner.