|President Moon Jae-in presides over a weekly Cabinet meeting held at the KIST, northern Seoul, Tuesday morning. Yonhap|
By Kim Yoo-chul
President Moon Jae-in vowed Tuesday to pursue an economic agenda that will help revitalize the economy with his administration investing heavily in industrial components directly affected by the worsening trade row with Japan.
"Strengthening South Korea's overall competitiveness in industrial materials and components is of utmost importance in terms of the country building the foundations for sustainable economic growth that will last more than a century. This is a task beyond South Korea-Japan relations," Moon said at the start of a Cabinet meeting at the Post-Silicon Semiconductor Institute in the Korea Institute of Science and Technology (KIST), northern Seoul, according to Cheong Wa Dae press pool reports.
This is the second time for the President to hold the weekly meeting in a non-government location since February. "I simply want to elaborate my priority for a stronger economy that no one can damage (regardless of external factors) as we have to respond urgently to various economic challenges," Moon said, calling KIST the "right place" for technological development.
"KIST led to the development of industries crucial to the country's economy. We are leading the race in developing original technologies, stepping beyond being a fast-follower," the President said praising the rapid growth in the shipbuilding, automotive and steel industries. "If we create a better industrial eco-system between conglomerates and small and medium-sized enterprises (SMEs), the country will have a stronger supply chain."
The remarks came a day after controversial law professor Cho Kuk started work the justice minister after being appointed by Moon, Monday, despite an ongoing prosecution investigation into various alleged crimes committed by Cho's wife. In an unusual, nationally-televised address, the President said he felt sorry about the ongoing controversy surrounding the Cho family but added his appointment of Cho was aimed at reforming the prosecution.
Moon's stress on developing "core technologies" comes as exports for the first 20 days of August fell 13 percent from a year earlier, signaling a ninth successive monthly decline. Asia's fourth-largest economy is already being affected by the Washington-Beijing trade and associated technology war. But Japan's decision to withdraw South Korea from its list of trusted partners is adding more pressure at an already crucial time.
The material impact of the ongoing trade friction has been limited to date. However, officials say the choice to restrict exports of core chemical ingredients crucial in fabricating memory chips and display panels shows Tokyo is intentionally targeting a sensitive part of South Korea's economy with precision.
After the Japanese move, top-tier conglomerates Samsung and LG have been increasing their investments in "core industrial materials" with the government offering financial and administrative support to encourage them to cut their dependence on Japanese companies in procuring these components.
"The government will aggressively increase investment," Moon said at the meeting. He noted the government will spend up to 5 trillion won ($4.2 billion) to help companies and research institutes cut their dependence on Japan for components over the next three years.
In additional backing, the Cabinet separately approved a plan to create a presidential panel to be chaired by the finance minister on lifting the country's competitiveness in industrial materials and relevant core equipment.