Small Business COVID-19 Relief Fund... Effectiveness Questioned Amid Fairness Concerns

청 "Support up to 3 million won for small business owners and self-employed"
"Rather than 'one-time' support, raise to level 3" criticism
Calls for universal payment instead of selective distribution

On the afternoon of the 15th, a banner demanding the guarantee of the right to livelihood for commercial tenants was hung at the entrance of Myeongdong, Seoul. Photo by Yonhap News

[Asia Economy Reporter Kim Young-eun] The government announced that it will provide up to 3 million KRW in support funds to small business owners who have suffered damages due to the spread of the novel coronavirus infection (COVID-19). However, there are criticisms that the support funds lack fairness. Additionally, there are criticisms that this is only a temporary support fund and cannot be a fundamental solution to alleviate the pain of self-employed individuals during the COVID-19 spread phase.

On the 27th, the government announced that it will provide support funds worth up to 3 million KRW to small business owners and self-employed individuals who have been subject to business suspension or restriction measures due to the escalation of social distancing levels. This will be finalized after the Cabinet meeting and the Emergency Economic Central Countermeasures Headquarters meeting on the 29th.

According to the policy, 1 million KRW will be commonly paid as business damage support funds to general small business owners and those who have been subject to business restriction or suspension measures. An additional 1 million KRW will be paid to businesses under gathering restrictions, and 2 million KRW to businesses under gathering bans. In other words, general businesses will receive 1 million KRW, restricted businesses 2 million KRW, and banned businesses 3 million KRW in support funds.

However, there are bitter voices regarding this support policy. Some small business owners argue that rather than a 'flash' support fund, it would be more helpful for the industry to achieve long-term effects through strong COVID-19 prevention policies such as raising social distancing to level 3.

Earlier on the 27th, the quarantine authorities judged that it is possible to maintain the current quarantine and medical system capacity and that it is necessary to observe the effects of the year-end and New Year’s special quarantine strengthening measures such as gathering restrictions. Therefore, they decided not to raise social distancing in the metropolitan area to level 3 and to extend level 2.5 until January 3.

In response, a self-employed person posted on an online community, "The support fund is not even enough to cover a month’s store maintenance costs and rent, so even if I receive it, nothing will really change," and added, "Because of business restrictions, there are almost no customers, so I am thinking about closing the store entirely. Rather than this support policy, it would be better to raise to level 3, endure 2 to 3 weeks of hardship intensively, and then resume business."

Another self-employed person appealed in a comment, "I don’t know why they are not raising to level 3. Since business is not going well anyway, please catch COVID-19 quickly so that people can at least maintain a basic livelihood."

The third wave of the novel coronavirus infection (COVID-19) is spreading in South Korea, and on the 13th, the streets of Myeongdong, Seoul, appeared deserted. Photo by Yonhap News

Furthermore, there are claims that the support limited to small business owners and the scale of the support funds are unfair to non-regular workers who lost their jobs due to COVID-19, unpaid leave workers due to personnel adjustments, tourism industry workers, and others. Some voices also express concerns about national fiscal soundness.

Mr. A (51) said, "I worked at a restaurant, but business has not been good lately, and since fewer people dine in the hall, the restaurant told me to rest for a while, so I have been at home for a month," adding, "It’s called resting, but I don’t know when I will be called back, and I am just waiting endlessly without income." Mr. A continued, "I am not self-employed, but workers like me are also struggling after losing jobs. There must be cases worse than mine," and lamented, "I hope everyone understands that all citizens are generally having a hard time."

Relatedly, on the 24th, a petition titled "Please decide on the 3rd disaster relief fund as universal payment" was posted on the Blue House National Petition Board. The petitioner stated, "There are many people in difficulty around me, but it was hard to see people who received support funds," and argued, "Most citizens cannot even make ends meet if they stop working and stop activities. If stopping is required, measures to make a living must also be prepared."

The petitioner further urged, "COVID-19 did not only damage the industries chosen by the government," and said, "It affects most workers and common people except public officials and regular workers. Please do not ignore the suffering of the people and decide to provide the 3rd disaster relief fund as universal payment."

Meanwhile, the government announced that it will start providing support funds to self-employed individuals and small business owners from January 1 next year and plans to complete the payments before the Lunar New Year holiday. The scale of the disaster relief fund is expected to be around 3 to 5 trillion KRW. Choi In-ho, senior spokesperson of the Democratic Party of Korea, said at a briefing after the 7th high-level party-government meeting on the 27th, "We shared the understanding that we will start payments from early January and aim to complete cash payments within January, and will proceed swiftly."

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