Chairman Son Kyung-sik: "We Must Prepare for Prolonged COVID-19... Bold Government Support Needed"

[Asia Economy Reporter Suyeon Woo] Sohn Kyung-shik, Chairman of the Korea Employers Federation, emphasized the need for the government's full support for companies amid the economic difficulties caused by the novel coronavirus infection (COVID-19). He also added that the government, labor, and management should find cooperative measures to maintain employment in companies as much as possible.

On the 22nd, Chairman Sohn stated at the Korea Employers Federation Management Development Advisory Committee held at The Plaza Hotel in Jung-gu, Seoul, "Although the government has been responding by preparing various support measures, there are many voices on the ground calling for more active support." He continued, "Especially when large companies face problems, the ripple effects on employment and the entire industry inevitably become greater," adding, "Bold and sufficient government support is requested regardless of the size of the company."

He predicted that the contraction in consumption and corporate activities caused by COVID-19 would be prolonged for a considerable period. Chairman Sohn emphasized, "The prevailing view is that it will be difficult for the global real economy to recover to the pre-COVID-19 state at least until the end of next year, so our economy must respond with a long-term perspective."

Regarding employment issues in companies, he stressed that labor, management, and government must find ways to protect jobs through mutual cooperation. He particularly argued that government policies should focus their capabilities on maintaining corporate employment as much as possible. He pointed out, "So far, despite a sharp drop in sales and reduced workloads, companies have been absorbing labor costs at levels similar to previous years, but if this situation continues for a few more months, companies will not be able to bear the enormous costs of maintaining employment."

Furthermore, Chairman Sohn emphasized that in the 'post-COVID' era after the pandemic, global survival competition could become even fiercer, and to strengthen the competitiveness of Korean companies, which have a high degree of global dependence, regulatory innovation and investment activation that revitalizes the 'energy (gi)' of companies are necessary.

Meanwhile, Professor Lee In-ho of Seoul National University’s Department of Economics, who gave the keynote presentation that day, also stressed the need to respond by dividing scenarios for economic recovery before and after the 'social distancing' caused by COVID-19. He argued that during the period when social distancing continues, policy direction should focus on preventing corporate bankruptcies, and afterward, support for consumption and investment to strengthen competitiveness should be carried out simultaneously.

Professor Lee said, "Primarily, it is important to prevent fiscal soundness deterioration through concentrated support for service industries such as aviation, tourism, dining, and small business owners severely impacted by COVID-19," adding, "During the recovery phase, support for consumption and investment and strengthening competitiveness to improve the economic structure are desirable."

He continued, "To overcome COVID-19, it is necessary to establish a new economic order from a mid- to long-term perspective," and added, "To overcome the crisis, the massive liquidity injected should not create an asset market bubble, so a return to normal interest rate levels is necessary afterward."

This content was produced with the assistance of AI translation services.