[Report] "All I Can Do Is Sigh"... Merchants in the Food Alley Also Sigh Amid a Chilly Start to the Year

"Closure May Be Necessary"... Deep Sighs from Self-Employed as Social Distancing Extended
Government to Prepay 5 Million Won Compensation for COVID Losses to Self-Employed

On the 3rd, the food alley in the Sinchon university district of Seodaemun-gu, Seoul, appeared quiet. Photo by Heo Midam damdam@

[Asia Economy Reporter Heo Midam] "We get fewer than ten groups of customers a day. We just endure blindly, thinking 'It will get better someday.'"

On the 3rd, Mr. Kim, in his 40s, who runs a barbecue restaurant in Sinchon, Seodaemun-gu, Seoul, lamented, "There are definitely fewer customers than during the 'With Corona' period. Even then, we didn't have many customers, but more than now. Especially for barbecue restaurants like ours, many customers come in the evening, but since the operating hours were restricted, almost no customers come after 8 p.m."

Mr. Kim added, "Usually, there are many reservations and customers at the end and beginning of the year. But due to COVID-19, customers have become scarce. If this continues, I think we might have to consider closing down."

As the government decided to extend the current social distancing measures for two weeks, self-employed business owners' opposition has intensified. Those who had expected a peak season during the year-end and New Year are sighing deeply, saying, "The peak season has long been lost" due to the strict distancing measures. Some self-employed individuals appear to have moved beyond disappointment to resignation.

According to the quarantine authorities, the current social distancing measures will be extended for two weeks from today until the 16th. Accordingly, private gatherings are still limited to four people, and operating hours for restaurants and cafes are restricted to 9 p.m.

Small business organizations have raised critical voices against the government's measures. The COVID-19 Victims' Self-Employed General Federation (Coja Federation), composed of six organizations including the Korea Foodservice Industry Association and the Korea Franchise Industry Association, issued a statement saying, "The distancing measures ultimately deprive self-employed people of their right to survive," and emphasized, "The government must compensate 100% for the losses incurred."

A sign reading 'Temporary Closure' is posted at a restaurant in the Sinchon Food Alley, Seodaemun-gu, Seoul. Photo by Heo Midam damdam@

Merchants in the popular 'Mukja Alley' also expressed dissatisfaction with the government's quarantine guidelines. Mr. Hwang, in his 40s, who runs a pub in Sinchon Mukja Alley, sighed, saying, "It's frustrating. Of course, I understand that distancing is necessary because of the high number of confirmed cases. But I don't know how long we have to endure this indefinite distancing."

He continued, "Restaurants are struggling, but pubs are really having a hard time. I don't know what I did wrong to have to live like this."

Given the situation, self-employed people affected by the prolonged COVID-19 pandemic are considering closing their businesses. In the Sinchon Mukja Alley area, notices for 'rental inquiries' indicating closures could be seen in many places. In particular, a three-story building was completely empty without any separate notice. Some stores also announced temporary closures due to the government's high-intensity distancing measures.

Originally, the Sinchon area was bustling with crowds due to the concentration of four universities: Sogang University, Yonsei University, Ewha Womans University, and Hongik University. However, due to the impact of COVID-19, with universities conducting seasonal semesters online and the continuation of strict distancing measures, the commercial district is greatly shaken.

A sign reading 'For Lease Inquiries' is posted at a store in Sinchon, Seodaemun-gu, Seoul. Photo by Heo Midam damdam@

Meanwhile, some self-employed people have been taking on debt to endure the COVID-19 crisis. According to the Financial Stability Report released by the Bank of Korea in December last year, loans to self-employed individuals have increased sharply since COVID-19.

Loans to self-employed people hit hard by COVID-19 reached 887.5 trillion won as of the end of the third quarter last year, a 14.2% increase compared to the same period the previous year. This growth rate is faster than that of household loans (10%) during the same period and also exceeds the 13.7% increase in the second quarter.

Meanwhile, the government decided to first provide 5 million won in loss compensation to 550,000 small business owners and self-employed people affected by quarantine measures in the first quarter of this year. This means that about 2.75 trillion won out of the 3.2 trillion won budget for loss compensation in the new year will be spent all at once at the beginning of the year.

Prime Minister Kim Boo-kyum said at the Central Disaster and Safety Countermeasures Headquarters meeting on the 31st of last month, "With the extension of social distancing, loss compensation will be necessary in the first quarter of 2022 as well," and added, "We will accept applications from about 550,000 small business owners and self-employed people and provide 5 million won in advance, then settle the final compensation amount later."

However, the Small Business Federation issued a statement pointing out, "The policy of advance payment and later settlement marks a shift in the loss compensation support plan," but also said, "Small business owners want to be fully compensated for their losses."

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