South Korea Sets Up Control Tower for Stable Supply Chains

South Korean Government to Establish Control Tower for Supply Chain Stabilization

The South Korean government has announced its plans to establish a cross-government control tower to address supply chain issues and ensure stability. This initiative comes in response to concerns over recent supply shortages and disruptions. The control tower, set to operate until June of next year, will be supervised by a supply chain committee consisting of central government officials and experts in the fields of economy and security.

Efforts to Enhance Supply Chain Resilience and Risk Response

Deputy Prime Minister and Minister of Planning and Finance, Mr. Choi Kyung-hwan, presided over a meeting to discuss the implementation plan for the Supply Chain Basic Act. During the meeting, Deputy Prime Minister Choi emphasized the increasing risks posed by supply chain vulnerabilities to various industries and people’s livelihoods. He highlighted the recent passage of the Supply Chain Basic Act in the National Assembly, stating that it will strengthen the government’s response and recovery capabilities regarding supply chain risks.

Comprehensive Plan for Supply Chain Stabilization

The supply chain committee will make efforts to finalize a comprehensive plan for supply chain stabilization and support in the second half of next year. Based on this plan, each ministry will establish their respective implementation plans by January of the following year. To support the committee’s work, the supply chain planning team will be reorganized as a permanent organization.

Enhancing Collaboration and Essential Material Management

The committee will review and manage essential materials and raw materials designated as economic security items by relevant ministries. This approach aims to promote collaboration between ministries and improve the effectiveness of the existing early warning system for supply chain management. Such cooperative efforts will ensure a coordinated and efficient response to potential supply chain disruptions.

Supporting Leading Supply Chain Operators and Establishing Stabilization Fund

To support leading supply chain operators, the Korean Export-Import Bank will establish a supply chain stabilization fund. This fund will be financed through government-guaranteed supply chain fund bond issuance and will be utilized for securing economic security items and supporting domestic and international investment in facilities. The fund’s operation is planned to commence in the second half of next year, following approval from the National Assembly and the establishment of a fund management review committee.

Ensuring Supply Stability and Diversifying Imports

In order to alleviate the burden on businesses resulting from supply disruptions, the government will extend temporary allocation tariffs for certain imported items until next year. Additionally, temporary support for a portion of maritime transportation costs for imported goods will be provided until April next year. The government is also implementing a fast inspection system to expedite the process from receiving imported finished products to issuing inspection certificates. Furthermore, measures to apply allocation tariffs to auto parts from Indonesia and Saudi Arabia are being considered to promote import diversification.

Promoting Self-Reliance and Monitoring Domestic Supply Situation

Starting from January next year, the government will consider the establishment of domestic production facilities in the long term to promote self-reliance. The government will closely monitor the domestic supply situation on a daily basis and take necessary measures, such as issuing notifications and adjusting emergency supplies if needed. Cooperation is being sought from various industries, including transportation, bus, and construction machinery, as well as gas stations, to limit the purchase of essential items per person and prevent hoarding.

Conclusion

The establishment of a cross-government control tower and the implementation of various measures aim to stabilize the supply chain and enhance the resilience of the South Korean economy. The government’s efforts to respond to supply chain risks, promote collaboration, and support domestic production will contribute to long-term economic security and growth for the country.

Source: Kyunghyang Shinmun