Korean Government Steers ‘Right’ for 2010
There are many ways of doing a rain check for the year 2010. One can observe the clouds to see which way the majority is tilting towards, feel the gushing winds and see what the media has to say, or one can simply see what the government has to say about the following year. With all the speculation about what has to happen in 2010, the government certainly seems firm about their plans and policies that will lead to economic development, better living standards, and overall just do a better job putting food on the table for everyone.
Biosimilars, also known as Follow-on Biologics, are official new versions of biopharmaceutical products after their patents expired. For example, the expiry of insulin has created a new branch of pharmaceuticals where copying insulin makes it available for production by any company. By 2016, the patent to approximately 50 bio medications will expire. Therefore, there is a great race between nations and firms to see, which can produce biosimilars to these expired drugs first. Due to the recent expansion of the market of biosimilars, there will be much attention to the policies bound to be made in Korea and overseas. Along with the possibility of the American Healthcare Policy to pass, there is much discussion by the Korean government about the active promoting of the biosimilars market. On December 23rd, analyst Shin Ji-won of Mirae Asset Securities stated, "On the 21st of last month, the Ministry of Knowledge Economy announced on its business report that the government implied an increase in investments in the field of biosimilars next year of W565.4 billion, a 19 fold increase in comparison to 2009. In addition to this, there is a high possibility of the United States passing its large healthcare reform bill to widen security, and encourage the use of low priced medication." Eventually this shows that the market for biosimilars will multiply and these movements will bring forth more influence in the future. Analyst Shin Ji-won also added, "Companies related to bio-generics are being constantly questioned on their possibilities of gain from their encouragement of use of generics and first guidelines following the FOB bill. I sustain my positive preferences on companies that will comparative superiority including Celltrion, and LG Life Sciences. The firms we will have to look out for next year are those that hold the pipeline including Isuabxis, the Green Cross, Yuhan Corporation, Daewoong Pharmaceuticals, Donga Pharmaceuticals, and Hanmi Pharmaceuticals." Experts say that the market for biosimilars will rise from the W3 trillion in 2008 to W32 trillion in 2015.
Policies go Green
After the UN Climate Change Conference held in Copenhagen, the general direction of the world has changed to doing all the regular economic developments and improving living standards while saving the planet. Therefore, the eco-friendly policies are something that cannot be ignored. The environment has never gotten so much spotlight before. The Ministry of Environment held an open business report which announced issues concerning the climate change. The Ministry of Environment announced that it will actively advertise the 'Carbon Points' system for two million households to register for. Carbon points are given to households that reduce their use of electricity, water, and gas depending on how much they reduce. In addition, the Ministry of Environment is also planning on expanding the number of Hybrid Cars to 10 thousand. An amendment to specify greenhouse gases as air pollutant materials are also being formed for September 2010. An analysis system to evaluate the amount of greenhouse gases emitted from different development projects will be ready by January 2010. The Ministry of Environment stated that, "Green Growth Korea and other related organizations will cooperate to reduce the amount of greenhouse gases by time and sector by 2020. We will work to reduce greenhouse gases by 30 percent by 2020." The Ministry of Environment additionally said that, "We will also introduce a system that will pay incentives to cars that emit a low amount of greenhouse gases and, on the contrary, penalize cars that emit a high amount of greenhouse gases."
The experts state that the real estate market may be going through a recession but these are only regional symptoms. There will be a revival in the real estate market next year due to the reduction of the supply real estate held for sale and housing loss from the development in the Urban Renaissance Project. So will this mean sunny days with a piña colada next year? Opinions differ. The plan for housing supply next year is 250 thousand households in metropolitan areas, adding up to a sum of 430 thousand to 450 thousand households nationwide. According to the Ministry of Land, Transport and Maritime Affairs the government will supply 180 thousand households for rent and sale, and 20 thousand households for multi-family purchases and housing rent. Private corporations are also planning on building 230 thousand to 250 thousand households next year.
If all goes as planned, the plan for supply of housing for next year will be more than the 360.9 thousand provided this year. However, the benefit of the real estate transfer reduction will expire in February 2010 and the revoking of the cost index for updating the standard price cap for private land is also unclear at this point so there is the possibility for the supply of private sectors to contract. Analyst Cho Eun-sang from Dr. Apartments stated that real estate costs next year will record a 2.9 percent increase in rate of trade fluctuations for metropolitan areas. Analyst Cho added that the optimistic expectations for next year, the June elections, and more than W40 trillion land compensation costs will bring a shortage in move-in rates. However, the anxiety of the financial crisis is still inherent and there is a fall in expectations for investors. This applies even more to rural and underdeveloped areas. Many experts state that the polarization of the real estate market will be evident next year. Except for those areas close to metropolitan cities with development plans, the unpopular and undiscovered territories are likely to stay barren next year. However, Park Sang-Eun of U&R Consulting stated, "The number of real-estate held for sale reduced by a mere 40 thousand households. The apartment real estate market did not do too badly this year. Next year the real estate market, with the rise in interest rates and exit strategy, is expected to change."
The market for real estate is in a no-man's land right now where people are unsure which way it will turn next. However, with the government incubating the new field of biosimilars as one of the forerunners in the world, the view looks somewhat promising for Korea in the long run. The same applies to the plan for an eco-friendly economy. The plan promises an influx of new jobs and new opportunities. In the end, all that will matter is whether the government policies will work to put food on the table. Hopefully, they will bring a feast.