Seoul: The Ministry of Trade, Industry and Resources announced on Tuesday that it has earmarked 924.1 billion won (US$609 million) in an additional budget to address the Mideast crisis amidst disruptions to energy and industrial supply chains.
According to Yonhap News Agency, this development follows the Cabinet's approval, under the leadership of President Lee Jae Myung, of a government proposal for a 26.2 trillion-won supplementary budget. This budget aims to mitigate challenges arising from escalating conflicts in the Middle East and to rejuvenate the local economy. If passed by the National Assembly, it will include cash handouts totaling 4.8 trillion won to the bottom 70 percent of income earners.
The ministry has outlined plans to allocate 664.2 billion won towards stabilizing supplies of crude oil and strategic industrial materials, such as naphtha. The country faces challenges in supplying these items due to the effective closure of the Strait of Hormuz following the onset of the Iran war. Of this amount, 469.5 billion won will support domestic petrochemical companies running naphtha cracking facilities, while an additional 158.4 billion won will secure extra oil reserve supplies.
Furthermore, 22.3 billion won has been designated for addressing unfair market practices related to fuel prices, and 8.1 billion won for developing domestic production infrastructure for rare earths, as indicated by the ministry.
The ministry also plans to inject 145.9 billion won into assisting small and medium-sized enterprises experiencing export challenges due to the Middle Eastern unrest and aiding petrochemical and other industries affected by the crisis.
An additional 114 billion won is set to promote the artificial intelligence (AI) transformation of manufacturing industries, including shipbuilding, steel, and automobile sectors, to enhance their long-term competitiveness.
The supplementary budget bill is expected to be presented to the National Assembly for approval, with opposing parties having agreed to vote on the bill next Friday.