Korea's top business lobby ties economic recovery to green growth

The Federation of Korean Industries FKI building in Seoul Courtesy of the FKI — The Federation of Korean Industries building in Seoul/ Courtesy of the FKI

SEOUL, September 04 (AJP) - South Korea’s most powerful business lobby urged the government Thursday to pair consumer stimulus with an ambitious green transition as the country struggles with sluggish growth and rising climate pressures.

The Federation of Korean Industries, which represents the country’s largest conglomerates, presented a seven-point “renewal” strategy that it said could both spur household consumption and advance the nation’s carbon neutrality goals.

The initiative borrows from China’s trade-in policies, which encourage consumers to replace outdated goods with cash rebates for newer, more efficient products.

The plan underscores growing pressure on policymakers to find ways of jump-starting Asia’s fourth-largest economy, which has been buffeted by weak consumer spending, global trade frictions and the costs of a low-carbon transition.

The proposals cover a wide range of sectors: transforming homes into high-efficiency “smart” dwellings, accelerating the shift to green mobility, overhauling aging infrastructure, upgrading artificial intelligence systems, and expanding cultural and residential development.

Much of the plan hinges on large-scale replacement of old vehicles and appliances. The federation called for scrappage subsidies to retire internal combustion cars and broadened incentives for electric and hydrogen vehicles, including tax breaks and direct subsidies.

It also urged the government to extend programs that support energy-efficient appliances and expand eligibility for consumers.

On the industrial front, the group recommended greater support for “smart green” industrial complexes and new carbon-reduction incentives to speed companies’ environmental transitions.

For housing, it pushed for easing regulations on reconstruction projects and loosening floor-area restrictions to make green remodeling more attractive to private developers.

“The seven tasks proposed by FKI serve as a roadmap to inject vitality into the stagnant economy and secure future growth engines,” said Lee Sang-ho, head of the federation’s economic and industrial research department. “The government needs to actively consider this as a means to improve Korea’s economic fundamentals by enhancing productivity across all sectors.”

Kim Dong-young davekim0807@ajupress.com