South Korea: DLT To Solve The Problems of Unemployment and Government Budget Deficit
RegulationBit News Today2 min read
The South Korean government has unveiled a 5 trillion won ($4.4 billion) investment plan for the coming year, aiming to spur economic growth and tackle unemployment through targeted investments in strategic technologies and key industries, including a significant allocation to blockchain development.
The investment, announced by Yonhap, marks a substantial increase from this year's 2.9 trillion won budget. Out of the total 5 trillion won, 1.5 trillion won will be dedicated to developing three strategic technologies, a 71% increase from this year's 900 billion won. The remaining 3.5 trillion won will be directed towards eight strategic industries, representing a 62% rise from the 2 trillion won allocated in 2018.
A significant portion of the 2019 budget, amounting to 470.5 trillion won, was proposed in late August, reflecting a 9.7% increase from 2018's 428.8 trillion won. According to the Korean government's official newswire, this earmarks 23.5 trillion won (around $21.2 billion US Dollars) for job creation—an unprecedentedly large allocation aimed at addressing youth unemployment that has seen an increase to 9.9% last year.
Evidence of the urgent need for effective interventions includes recent figures showing the jobless rate in August reaching 4.2% as the number of unemployed rose by 134,000 people, the country's worst figure in eight years. 105,000 jobs were lost from manufacturing alone. The overall number of employed people rose by just 3,000, the worst figure since January 2010.
Among the strategic technology investments, innovative technology development stands out with a planned expenditure of over 880 million US dollars including blockchain. While the precise allocation to blockchain is unspecified, this figure represents a significant proportion of the 4.4 billion total.
Last month, KT Corp, South Korea's second-largest mobile carrier, introduced its first commercial blockchain network. This move positions the carrier as a pioneer in the field, with growing market expectation for an expansion of the local blockchain industry's value to 1 trillion won by 2022, as projected by the Ministry of Science and ICT.
However, opposition parties have raised concerns about certain budgetary aspects. The ruling Democratic Party and the main opposition Liberty Korea Party reached an agreement to trim fiscal spending by 5.2 trillion won from the government's original 470.5 trillion won budget, targeting 1.1 trillion won allocated to inter-Korean projects and the record-breaking 23.5 trillion won for job creation.
With the proposed budget still under review by the National Assembly, the final outcome of this initiative remains uncertain. However, globally, the investment reflects the growing recognition of blockchain technology's potential beyond its origins in cryptocurrencies. Only time will tell if these concentrated efforts to prioritize growth and jobs will find success.
