South Korea to create $3.5 billion fund for supply chain resilience, economic security

Seoul: The government will create a 5 trillion-won ($3.59 billion) fund to extend low-interest rate loans for companies playing a major role in ensuring stable supply chains and will provide tax incentives for corporate development of key technologies, the finance ministry said here on Thursday.

It is part of the government’s comprehensive plan meant to stabilise supply chains of major materials and enhance economic security amid intensifying global supply chain challenges, particularly as South Korea is heavily dependent on foreign countries for supplies of natural resources and some major materials.

On Thursday, the basic law on supply chain stabilisation came into force, reports Yonhap news agency.

Under the plan, the government will designate leading businesses that work to diversify their import channels of major industry items or develop substitute technologies to reduce foreign reliance and provide them with cheap loans for three to five years.

It will activate up to 5 trillion won of supply chain stabilisation funds, starting in the second half of this year.

The government also decided to add 100 more items to its “economic security items list” to make it comprise a total of 300 items regarding the manufacturing, defense, logistics, cybersecurity and other sectors closely linked to the everyday lives of the people.

The ministry refused to make the details of the items public, citing security matters, though experts said urea, lithium, graphite and other materials are projected to be on the list.

The items will be divided into three categories in accordance with their importance, and the government will draw up detailed plans to ensure their stable supplies.

The government will review the list once a year, according to the ministry.

–IANS