Kim Tae-nyeon, on Criticism of 'Local Currency Side Effects': "There Is a Multiplier Effect... Expand Issuance Scale"

[Asia Economy Reporter Jeon Jin-young] Kim Tae-nyeon, the floor leader of the Democratic Party of Korea, stated that there is a multiplier effect regarding the Korea Institute of Public Finance's (KIPF) research claiming that local currency has adverse effects, and announced that the issuance scale will be significantly expanded.

Kim Tae-nyeon, the floor leader of the Democratic Party of Korea, is attending the policy coordination meeting held at the National Assembly on the 17th and delivering an opening remark. Photo by Yoon Dong-joo doso7@

On the morning of the 17th, at a policy coordination meeting held at the National Assembly, Floor Leader Kim said, "Local currency is playing a crucial role in revitalizing the local economy despite the COVID-19 situation." This appears to be a remark made in response to KIPF's research results.

On the 15th, KIPF published a research report stating that the issuance of local currency can cause various losses and costs. In response, Lee Jae-myung, Governor of Gyeonggi Province, criticized it as "a foolish national research institute that attacks government policies without basis."

Floor Leader Kim presented evidence, saying, "According to last year's research by the Local Government Research Institute, the issuance multiplier effect of local currency due to fiscal input was analyzed as 1.78 times based on production inducement and 0.76 times based on value-added inducement, showing a positive effect on increasing local production and value-added."

He added, "This proves that the production and value-added generated during the issuance and circulation process of local currency can create a virtuous economic ecosystem within the region."

He further emphasized, "The Democratic Party and the government will significantly expand the issuance scale of local love gift certificates to 15 trillion won in next year's budget. Recently, local love gift certificates issued by various local governments have been selling out. The scale issued last year was about 3 trillion won, but nearly 6 trillion won was sold in just the first half of this year."

However, he showed a somewhat accepting stance toward KIPF's concerns. Floor Leader Kim said, "Concerns that may arise from expanding local currency need to be addressed by finding improvement measures," and added, "There is a need to introduce a mobile simple payment system to solve the issues of gift certificate production and management costs." He also stated, "The Democratic Party will strive to establish a legal basis for app-based simple payment systems for small business owners during the 20th National Assembly."

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