President Lee Jae-myung on the 2nd described the spreading compound crisis caused by the prolonged Middle East war as "not a passing shower but a massive storm with no end in sight." He called for bipartisan cooperation in passing the government's 26.2 trillion won supplementary budget bill.
In his policy address to the National Assembly, President Lee warned that "even if the war ends tomorrow, it will inevitably take a considerable period for the destroyed energy infrastructure in the Middle East to be restored and for supply and demand to return to previous levels." He expressed an extraordinary resolve not to miss the golden time for overcoming the crisis through emergency fiscal injection and an all-out public-private response including energy conservation.
Nearly half of the "wartime supplementary budget" — 12.8 trillion won — will be allocated to easing the burden of high oil prices and stabilizing livelihoods. The spending focuses on the bottom 70% of income earners, low-income and vulnerable groups, and support for farmers and fishermen. The budget for industrial damage and supply chain stabilization was set at 2.6 trillion won, while the budget for petroleum and naphtha supply disruption support was limited to just 700 billion won. Support funds for the export and tourism sectors, which are bearing the full brunt of the war's shock, stand at approximately 1.1 trillion won. The government says it will provide a total of 9.18 trillion won in financial support to the export and tourism industries, but the effect of loans may be more limited than direct fiscal support.
President Lee said the current crisis "may not end in the short term." If so, beyond symptomatic fiscal remedies, there is a need to accelerate economic and industrial structural reform with a longer-term perspective. First, it is urgent to pursue fuel transition policies aimed at reducing dependence on oil and gas. The supplementary budget materials and President Lee's speech mentioned solar and renewable energy projects but did not address the expansion of nuclear power — a baseload energy source — or investment in related technologies, suggesting supplementation is needed.
Furthermore, the industrial constitution must be improved so that companies can absorb rising energy and resource costs through productivity gains. This requires policy support to make the rigid labor market more flexible and to overhaul regulations on manufacturing and logistics. Surgical reform of institutions that block the adoption of artificial intelligence (AI) and robots in production and logistics sites is also urgent. No matter how severe the crisis, the government must not delay the structural reforms in the six key areas it presented as part of its "great national transformation" agenda — regulation, finance, public sector, pensions, education, and labor. If the government and political circles cooperate on a bipartisan basis solely for the people, they can withstand even a massive storm.