The South Korean government has decided to provide the second round of grants but, this time, it will “customize” them for those who have been hardest by COVID-19. The government, the presidential office and the ruling party agreed in a meeting on Sunday to offer financial support to those who are struggling due to the resurgence of the virus and to draw up a seven trillion-won budget, the fourth supplementary budget this year. The government has revised the budget four times within a year, which is the first since 1961. The ruling party and the government have decided to issue state bonds to fund the program.
COVID-19 grants will likely be provided for small business owners in 12 industries that have been essentially shut down to stop the spread of the virus along with the self-employed, contractors, young people who have lost jobs and people on low income. The government has also decided to devise additional measures such as by extending the definition of flood damage, easing the criteria for low-interest loans for small businesses and clearing unpaid wages. It will set out details around these programs and announce them in the near future.
The decision on the second grants has been rushed by politicians without much consultation with experts. It was a political decision more than anything as they were suggested in the primary election for the leader of Democratic Party of Korea and backed by the opposition party. Considering the government has already introduced various programs that provide financial support such as loans, the job retention scheme and small business funds, it should have reviewed them first before offering another round of grants to improve their effectiveness.
The government and the ruling party had four months to discuss how the second grants should be given. There was great controversy around how grants should be provided the first time around in the run up to the April 15 general elections. Four months have passed, and they still have not come up with a better way of distributing them and are caught in the same controversy again.
Customized or exclusive, the government should now focus on how it can offer the grants in the fairest and speediest way possible as the decision has already been made. It is already facing a backlash from the public who argue that employees of small businesses such as karaoke bars and Internet cafes also need protection as well as the owners. The government should find where the scheme is missing and execute the plan promptly before Chuseok, Korean Thanksgiving Day. It should admit any mistakes made about the scheme and try to improve it if it were to minimize any side effects.