COVID-19 relief in disregard of principles and beliefs

The South Korean government and the ruling Democratic Party of Korea decided to provide 20,000 won to each South Korean citizen aged over 13 for their mobile phone expenses as part of the second round COVID-19 relief grant, which has been formed by drawing up the fourth revised supplementary budget. Their justification is to provide part of the mobile phone expenses that increased due to more untact activities by people due to COVID-19. South Korean President Moon Jae-in invited the leadership of the party to the presidential office Cheong Wa Dae on Wednesday and accepted the request of party leader Lee Nak-yon.

In fact, the ruling party announced a measure to provide a total of 660 billion won for mobile phone expenses – 20,000 won per each person aged 17 to 34 and over 50 – on Tuesday. The number of eligible people was 32.87 million or 63% of the population. As those who are ineligible raise a complaint about exclusion, the party expanded the scope of eligibility to all citizens aged over 13 and obtained Cheong Wa Dae’s approval.

Their idea is to resolve the complaints of the members and supporters of the party demanding the universal payment of COVID-19 relief by selectively providing small business owners with three trillion won and workers in special employment types with two trillion won while offering universal support to the rest, such as mobile phone expenses and child care support. The total amount of the fourth revised supplementary budget is about seven trillion won. Such a justification, however, is in sharp contrast with the principle of selective support mentioned by the prime minister a few days ago, saying, “The impact of disasters is harsher on those in vulnerable situations.”

Both the ruling and opposition parties, as well as experts, agree on the necessity of the second round COVID-19 relief. However, it is hard not to worry about the fall of the country’s credit rating as a result of increased sovereign debt from multiple rounds of the supplementary budget. President Moon who has emphasized that South Korea’s fiscal conditions are more sound compared to other OECD member countries admitted that there are real challenges in the country’s finance.

Amid the situation, the plan to provide mobile phone expenses to all citizens cannot avoid criticism that it is a populism policy in consideration of falling approval ratings. The ruling party’s head of policy committee even acknowledged a few days ago that the first round COVID-19 relief provided to all citizens had a somewhat populistic nature.

Prioritizing small business owners and unemployed young people was a rational decision that can be accepted by any reasonable citizen. It is not advisable to divide the financial resources – the entirety of which is debt – and distribute a little amount of support to all citizens just to resolve complaints raised by some.


Joong-Hyun Park sanjuck@donga.com