South Korea unveils 'Green New Deals' to kick-start economy

Yahoo News 6 Jan 09;

SEOUL (AFP) – South Korea said Tuesday it will invest some 38 billion dollars over the next four years in "eco-friendly" projects to create jobs and boost its slumping economy.

The government unveiled what it calls "Green New Deals" following the first meeting of cabinet ministers this year, which was presided over by President Lee Myung-Bak.

The deals feature 36 projects including the creation of network of bicycle tracks, provision of two million energy-saving "Green Homes" across the country as well as the construction of facilities using gas from rubbish.

"The Green New Deals are a strong expression of the government will to exert all its efforts to ease people's pain and create jobs," Prime Minister Han Seung-Soo said in a statement.

He said the projects -- amounting to 50 trillion won -- would lead to the creation of 960,000 new jobs and lay the ground work for further economic growth.

The central Bank of Korea has warned that facility investment will fall 3.8 percent this year, following a 0.2 percent contraction in 2008, undermining South Korea's growth potential.

Unemployment rose to 3.1 percent in November from the previous month's three percent as companies avoided hiring new workers due to a bleak economic outlook, the National Statistical Office said in December.

The Ministry of Strategy and Finance last month cut the country's 2009 economic growth forecast by one percentage point to three percent, saying the global financial crisis had spread to the real economy.

Under the projects, 18 trillion won will be invested in cleaning four major rivers and developing their surroundings to reduce disaster risks by building dams, banks and water-treatment facilities.

Another 11 trillion won will go to the construction of "eco-friendly" transportation networks including high-speed railways and hundreds of kilometres of bicycle tracks.

Energy-recycling projects include the production of garbage gas, while trees will also be planted and facilities built to harness energy from forest biological material.

The government will also invest in developing hybrid vehicle technologies.