[Report] "Not Much Help" vs "Already at the Limit" What Do You Think About Additional Disaster Relief Funds?

'With Corona' Implementation Day Two... Shops Stretching Out
Many Empty Sections... 'Lease Inquiry' Notices Packed Together
"Sales Will Increase but Financial Hardship Remains Large," Small Business Owners Appeal
Opinions Divided on 'Additional Disaster Relief Fund'
"No Significant Effect" vs "Useful for Low-Income Groups"

The underground shopping mall at Yeongdeungpo Station in Seoul, visited on the 2nd. Employees are preparing for business. / Photo by Juhyung Lim skepped@

[Asia Economy Reporter Lim Juhyung] "Now that the COVID-19 (social distancing measures) restrictions have been lifted, we have to be hopeful."

On the 2nd, Mr. A, the owner of a shoe specialty store in the Yeongdeungpo underground shopping mall in Seoul, expressed such expectations regarding the government's recent with-COVID (gradual return to normal life) policy. On that day, the shopping district was busy preparing for reopening. Mr. A hoped that the domestic economy, which had been frozen, would thaw with the with-COVID policy but lamented, "There are still many places barely hanging on, so I’m not sure if the shopping area will regain its former appearance."

As social distancing measures that had troubled self-employed and small business owners for over a year are being eased in earnest, expectations are growing that the livelihood economy will regain vitality. However, voices are emerging that support is still needed because the damage to the existing lower-income class has been so severe. In the political arena, the proposal for 'additional disaster relief payments' has sparked controversy. Supporters argue that it can stimulate consumption and help the recovery of shopping districts, while opponents counter that it would cost too much financially and that direct support for the self-employed is much more important.

◆Shopping districts 'stretching out' after with-COVID... Many empty units remain

That morning, the Yeongdeungpo shopping district was bustling with employees opening the previously closed iron shutters and displaying goods. Although it was early, there were quite a few citizens out shopping.

However, the effects of social distancing, which had lasted about 1 year and 8 months, were also clearly visible. Some stores were completely empty, and there were sections plastered with notices for lease inquiries without a single person around.

A part of the commercial building with a rental inquiry notice / Photo by Im Juhyung skepped@

Self-employed business owners operating in the shopping district cautiously predicted that sales would increase now that social distancing restrictions had been lifted, but they also complained that financial difficulties remain.

Mr. B, in his 50s, who runs a clothing store, said, "Everyone opened their shops with hopes that business would improve, but this is what it looks like now. When COVID was severe, the entire shopping district was quiet," adding, "I think there are still many more people losing money than making money here."

◆"More support for small business owners is urgent" vs. "Disaster relief payments will help the lower-income class"?debate over relief funds

Earlier, voices calling for additional support for the lower-income class suffering from COVID-19 emerged in the political sphere.

Lee Jae-myung, the Democratic Party presidential candidate, after attending an event in Goyang, Gyeonggi Province on the 31st of last month, told reporters, "The scale of COVID support relative to GDP is only 1.3%, which is ridiculously low compared to other countries," and urged, "Additional support is necessary to assist citizens facing economic difficulties, to encourage those who cooperated with national quarantine efforts, and to revitalize local small businesses with a combined effect."

At this event, Lee proposed the payment of 'additional disaster relief funds.' He emphasized, "At least an additional 300,000 to 500,000 KRW should be paid during the COVID phase." If every citizen received 500,000 KRW, it would require a budget of over 25 trillion KRW.

The opposition immediately reacted strongly. Yoon Seok-youl, a presidential candidate from the People Power Party and former Prosecutor General, countered, "It is appropriate to selectively support (self-employed and small business owners) as compensation for losses." Another candidate from the same party, Hong Joon-pyo, strongly criticized it as "a vote-buying act by distributing cash ahead of the presidential election."

Entrance of Yeongdeungpo Market preparing for morning business. / Photo by Juhyung Lim skepped@

Among citizens, opinions were divided over the proposal for 'additional disaster relief payments.' Mr. C, who runs a restaurant at an outdoor market in Seoul, said, "Disaster relief payments have never been very helpful. When they were first given, sales rose sharply for a few weeks but then stopped," and argued, "If that money had been used to support self-employed people, there wouldn’t be so many restaurants closing."

On the other hand, there were voices supporting the need for relief funds. Mr. D, a citizen in his 50s shopping at Yeongdeungpo market that day, said, "300,000 to 500,000 KRW is by no means a small amount for ordinary people. It was a comfort during difficult times," adding, "Since most of it will be paid in local currency anyway, it can only be spent in the market. I think it helps both self-employed people and the lower-income class."

◆Lee Jae-myung: "Politicians follow public opinion once it is formed"

The government has taken a cautious stance on the additional disaster relief payment plan proposed by Lee. Prime Minister Kim Boo-kyum stated on the 3rd that there is "no capacity at the moment" to provide nationwide disaster relief payments as proposed by Democratic Party presidential candidate Lee Jae-myung. On CBS Radio's 'Kim Hyun-jung's News Show' that morning, Kim said, "This year’s budget will be fully spent in two months," and emphasized, "The fiscal authorities are always disliked by the public, but from their perspective, the money and resources available are limited. It’s not a situation where you can just dig into every pocket and find money."

Also, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, avoided directly answering questions about disaster relief payments from reporters while visiting Rome, Italy, for the G20 summit on the 30th of last month (local time), saying, "It is inappropriate to discuss this here in Rome."

Hong has previously clashed with Lee over disaster relief policies and other fiscal spending issues. In response, Lee criticized Hong, saying, "The debate between bureaucrats and politicians does not necessarily have to be based on academic theories and evidence; it is a matter of (political) decision-making. Once public opinion is formed, bureaucrats and politicians follow it."

Meanwhile, the government is pushing forward with loss compensation for about 800,000 small and micro-businesses that suffered losses due to COVID-19-related gathering bans and business hour restrictions starting from the third quarter (July to September) of this year. The average compensation per business is about 3 million KRW, totaling approximately 1.8 trillion KRW.

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