[Deputy Editor's Column] The Homework Left by the Emergency Disaster Relief Fund

[Asia Economy Reporter Kim Jong-hwa] The Emergency Disaster Relief Fund is an unprecedented policy in which the government provided cash to all citizens to guarantee the livelihood and income of people economically affected by the prolonged COVID-19 pandemic.

It was good that a minimum of 400,000 won to a maximum of 1,000,000 won was paid to a total of 21.71 million households, but there were considerable conflicts of opinion before the decision was made.

The restriction on usage, which prohibited spending at department stores, large discount stores, online shopping malls, and entertainment establishments to support small business owners and self-employed individuals, also sparked controversy. While some complained about the inconvenience of not being able to use the funds at large discount stores like E-mart and Lotte Mart, which they frequently visited, as well as supermarkets operated by these stores, domestic furniture companies opposed the inclusion of IKEA, a global furniture giant, as a store where the relief fund could be used, arguing it was against the original intent.

The design that required the head of the household to apply and receive the funds also became problematic. In reality, there are many cases where the head of the household cannot represent the family’s life, such as families living separately due to domestic violence, sexual violence, or child abuse victims; divorced couples who have not settled their health insurance dependent status; households whose composition differs from legal family relationships; households in divorce litigation; and households effectively living apart.

Petitions opposing receipt by the head of the household flooded the Blue House’s public petition board, and about 70,000 objections were filed with the Ministry of the Interior and Safety. Eventually, the government took measures to allow receipt separately from the head of the household through these objections. Since this was the first time implementing such a policy, the mistakes were too significant and clear to be dismissed as mere trial and error, making it difficult to avoid criticism of administrative convenience.

Despite these twists and turns, fortunately, consumer sentiment frozen by COVID-19 seems to be reviving. According to the 'May Consumer Sentiment Survey Results' announced by the Bank of Korea on the 26th of last month, the Consumer Sentiment Index (CCSI) in May rose by 6.8 points from the previous month to 77.6.

The Consumer Sentiment Index is calculated based on six major individual indices, including current living conditions, household income outlook, and consumption expenditure outlook, and comprehensively reflects consumers’ sentiment about the economic situation. A Consumer Sentiment Index above 100 means that consumers’ expectations about the economic situation are more optimistic than the past average (from 2003 to December 2019), while below 100 indicates pessimism.

The government and the Bank of Korea analyze the rise in the Consumer Sentiment Index as an effect of the Emergency Disaster Relief Fund. President Moon Jae-in’s remark about being moved after hearing stories of people buying beef soup ingredients and getting new glasses with the support fund likely reflects the same context.

The Emergency Disaster Relief Fund was a one-time measure taken under the extreme circumstances of a pandemic, but it has great significance as a precedent for implementing practical support measures in a short time from the perspective of universal welfare. However, the problems that emerged while implementing this measure remain a major task to be reviewed and resolved.

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