/ 6 January 2009

South Korea announces ‘green new deal’ for jobs

South Korea said on Tuesday it will invest 50-trillion won ($38,1-billion) over the next four years on environmental projects in a ”green new deal” to spur slumping economic growth and create about a million jobs.

”We are in an unprecedented global economic crisis,” Prime Minister Han Seung-soo said in a statement. ”We must respond to the situation in an urgent manner.”

Energy conservation, recycling, carbon reduction, flood prevention, development around the country’s four main rivers and maintaining forest resources are among projects to be pursued under the plan, approved at a Cabinet meeting.

Han said the government’s ”Green New Deal Job Creation Plan” will create 960 000 new jobs, with 140 000 of those realised this year.

Trade-dependent South Korea is looking for ways to boost its slowing economy as global demand wanes for traditional mainstay goods such as cars and technological products.

Exports fell 17,4% in December from the same month the year before, following a drop of 18,3% in November, according to government figures. Unemployment, though still at a relatively low 3,1%, is expected to rise.

Amid deteriorating conditions, some private economists say Asia’s fourth-largest economy is facing the possibility this year of suffering its first contraction on an annual basis since 1997, when it was in the throes of the Asian economic crisis.

South Korea’s central bank is more optimistic, saying last month that the economy will grow 2% this year, compared with a revised estimate of 3,7% growth for last year. The economy expanded 5% in 2007.

President Lee Myung-bak said last month that South Korea’s economy may shrink in the first half of next year because of fallout from the global financial crisis but may still attain a positive figure for the year. – Sapa-AP