Busan is fully activating an emergency export support system to minimize damage to local companies as the prolonged Middle East conflict spreads its impact across the city's export economy.
The Busan Metropolitan Government said Monday it will significantly expand its support for small and medium-sized enterprises (SMEs) and launch a concentrated first-half support system in response to growing geopolitical risks stemming from the Middle East.
Through a supplementary budget, the city will operate its voucher program for SMEs facing export and import difficulties on an expanded scale of 890 million won. It will also allocate 456 million won for overseas logistics cost support and 1.284 billion won for overseas exhibition participation support.
Support procedures will also be significantly streamlined. The city plans to shift from the previous monthly application and review system to an annual bulk intake system, allowing companies to receive support more quickly. The move aims to speed up administrative processing and improve on-the-ground responsiveness as corporate damage expands in real time due to the prolonged war.
Logistics costs are the biggest concern for local companies. According to the city's monitoring of damage to local export SMEs since the outbreak of the Middle East war, logistics disruptions and rising freight rates accounted for 69.6 percent of all difficulties, the largest share. Delays in payment collection followed at 17.4 percent, and contract disruptions at 13 percent.
To reduce blind spots in logistics support, the city will also strengthen cross-program linkages. Companies that benefit from the overseas logistics cost support program will be able to receive additional logistics cost support through the "SME Export-Import Difficulty Voucher Program" for export shipments not covered by the former.
In particular, Busan will become the first local government in Korea to launch a "Joint Raw and Subsidiary Materials Purchase Support Program." For companies that import raw and subsidiary materials from overseas to produce and export finished goods, individual shipping processes drive up logistics costs. The joint purchasing initiative aims to improve transportation efficiency and reduce costs.
Despite growing external uncertainties, Busan's exports continue to grow. In March this year, the city's exports rose 11.7 percent from a year earlier and 23.2 percent from the previous month. The city plans to further accelerate corporate support to maintain this upward momentum.
"We will simultaneously strengthen both the speed and scale of support so that companies can quickly receive practical assistance they can feel on the ground," Acting Mayor Kim Kyung-deok said.
