Seoul, South Korea – South Korea’s Ministry of Strategy and Finance has announced a “National Wealth Creation Plan” aimed at systematically accumulating national wealth and transferring it to future generations, the most prominent feature of which is the creation of a new sovereign wealth fund in South Korea.
The announcement came during a business briefing held by President Lee Jae-myung today, where the ministry confirmed its intention to establish a “sovereign wealth fund modeled on the Korean fund” in the first half of next year, with the aim of making long-term investments in strategic national sectors. The new fund will be compared to major international sovereign wealth funds such as Singapore’s Temasek Fund and Australia’s Future Fund.
Enhancing the value of national assets and public housing in South Korea
The ministry is actively working to enhance the value and utilization of national assets, estimated at 1,300 trillion won, through measures including:
Government Property Management: Standards for managing and disposing of state property will be strengthened, and the sale of unused property at reduced prices will be prohibited in principle.
Housing: The South Korean government will increase the supply of public rental housing (PG) by developing public properties, such as old government buildings and abandoned police stations. The plan includes building 25,000 public housing units in the urban area by 2030.
Support for strategic industries: The reduction in fees for the use of national property will be expanded to companies operating in strategic industries such as artificial intelligence and renewable energy.
Improving bond issuance and supporting innovation in South Korea
The plan also included strategies to reduce interest costs and improve the issuance of government bonds, through:
Bond ratio adjustment: The ratio of short-term and long-term government bonds will be adjusted, and the issuance of short-term bonds with relatively low interest rates will be increased.
Attracting investors: Seeking to attract new foreign investors, including through inclusion in the World Government Bond Index (WGBI), and issuing 3-year government bonds targeting individual investors.
The promotion of future industries such as artificial intelligence and robotics will also be supported through public procurement, with the public procurement target for innovative products being expanded from 1 trillion won to 3 trillion won annually by 2030.
