Lee Jae-myung: "No Time to Waste Debating Selective Disaster Relief Payments"

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Lee Jae-myung, Governor of Gyeonggi Province, emphasized that the government's emergency disaster relief funds should be provided not in cash but in local currency. He also advised that since the current economic situation is due to a lack of demand rather than supply, the timing of the disaster relief payments should be advanced as quickly as possible to stimulate demand.

In a Facebook post titled 'What is needed now is not 'relief' but 'economic policy',' Governor Lee defined the current economic crisis caused by the COVID-19 pandemic as "not a shortage of supply but a shortage of demand."

He therefore stated, "We must focus on strengthening demand capacity and prioritize creating a virtuous cycle in the economy through demand expansion," adding, "The reason disaster relief payments are an 'economic' policy rather than a means to 'relieve' those in difficulty is precisely this."

Governor Lee also said, "Countries including the United States have provided disaster relief funds as an economic policy," and argued, "However, these should be paid not in cash but in local currency with an expiration date."

Earlier, as COVID-19 spread, many countries including the United States provided cash payments to their citizens. This was an economic policy aimed at stimulating the economy, which had sharply contracted due to reduced consumer activity.

Regarding the scale of payments by country, the United States provided $1,000 (approximately 1.2 million KRW) per person to all citizens except some high-income groups; Hong Kong gave 10,000 Hong Kong dollars (about 1.55 million KRW) to permanent residents aged 18 and over; Singapore provided 260,000 KRW to citizens aged 21 and over; Macau issued electronic vouchers worth 460,000 KRW to all permanent residents; and Japan paid 1.14 million KRW per person to all residents registered in the Basic Resident Register.

However, Governor Lee pointed out, "When disaster relief funds are paid in cash, most people tend to save them to prepare for an uncertain future," adding, "This has already been confirmed in Japan's past experience."

Accordingly, he stated, "They should be paid in 'non-circulating' local currency with an expiration date instead of cash," explaining, "Only then can it be ensured that the funds lead to consumption."

He further explained, "The economic effect of payments made in non-circulating local currency was already proven through the first disaster relief fund payment," citing, "According to Statistics Korea's household income trends for the second quarter, consumption decreased by 6% in the first quarter but turned to a 2.7% increase in the second quarter. Additionally, the Business Survey Index (BSI) and Consumer Sentiment Index also shifted to an upward trend in April and May, when applications for Gyeonggi Province's disaster basic income and the government's emergency disaster relief funds began."

Governor Lee also mentioned the importance of the speed of disaster relief fund support.

He advised, "Both basic quarantine and economic quarantine require speed," adding, "There is no time to waste on foolishness such as selective payment theories that cause division and conflict among the people. We must undertake a successful, non-discriminatory economic quarantine before the dam of our economy collapses."

In particular, he emphasized again, "Because COVID-19 spreads at a frightening speed, both basic and economic quarantine must be accelerated to minimize damage," and "Considering that it takes some time to decide and execute disaster relief payments, economic quarantine must also be expedited."

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