Kim Yong-beom, Vice Minister: "COVID-19 Tests Society's Internal Cohesion... Fiscal Debates Will Intensify"

Development of the System's Olympics in the Summer Olympic Vacancy
"Comparing the Limits of Crisis Response Capabilities"

Kim Yong-beom, the 1st Vice Minister of Strategy and Finance, is delivering opening remarks at the "16th Innovation Growth Strategy Review Meeting and Policy Review Meeting" held on the 3rd at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Sejong=Asia Economy Reporter Kim Hyunjung] Kim Yongbeom, the 1st Vice Minister of Strategy and Finance, predicted that the internal cohesion of a society would be revealed due to the COVID-19 pandemic, and if the COVID situation prolongs, various debates surrounding finances could unfold within each community.

On the morning of the 12th, Vice Minister Kim wrote on his social network service (SNS), "COVID-19 is changing the course of history around the world." He emphasized, "COVID-19 tests the degree of internal cohesion a society possesses. When faced with a crisis, a society may come together to protect the vulnerable, but there is also a significant risk that the crisis could open Pandora's box, which has been barely sealed until now, plunging the community into turmoil."

In particular, as the 'end of COVID-19 in the first half of the year' predicted worldwide becomes difficult, he foresaw that fiscal issues for long-term responses would arise. He mentioned the employment safety nets in the U.S. and Europe, where enormous finances are being poured through systems built over decades, and explained that Korea should also model after them. He stressed, "The employment safety nets in Europe and the U.S. are like a pie in the sky for other countries. As we plan the Korean New Deal with the goal of strengthening the employment social safety net, these are important models we should learn from." He added, "Both Europe and the U.S. believed the pandemic would be contained in the second half of the year and injected unprecedented amounts of finances in the first half for emergency responses. If the COVID situation prolongs, the next stage will hinge on fiscal capacity." Furthermore, he said, "Debates over the national debt burden surrounding new support programs are likely to intensify. However, since public health measures can only be effective if the basic livelihood of the people is guaranteed, if the COVID flames do not subside, a second support program in the U.S. will be inevitable."

Earlier, he noted that the European model, which focuses on employment retention rather than the U.S. employment system that pays unemployment benefits after layoffs, was more effective in the current COVID-19 crisis. He explained, "The U.S. significantly extended the existing unemployment insurance period and amount, and introduced a large-scale temporary employment retention system called the 'Paycheck Protection Program' by referencing the European model. However, in terms of results, many evaluations say Europe achieved greater cost-effectiveness. The U.S. employment retention program, hastily introduced as a temporary measure, spent a lot of money but was not very effective in preventing unemployment. Due to the lack of time to design the system precisely, large-scale financial support was only provided to companies unlikely to lay off employees anyway, which has been heavily criticized."

He described that in place of the 'Summer Olympics,' which could not be held due to the COVID-19 crisis, a global 'Institutional Olympics' is unfolding. Vice Minister Kim wrote, "If it were not for the pandemic, the world would now be swept up in the excitement and enthusiasm of the Summer Olympics. The rankings that disappeared every month are now replaced by the rankings of confirmed cases, and the pandemic has become an institutional Olympics comparing the limits of society's crisis response capabilities."

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