Seoul City Launches 'Emergency Economic Task Force' to Revive Livelihood Economy Amid 'COVID-19' Crisis

Emergency Support and Consumption Boost for Small Business Owners and Self-Employed to Revitalize Local Economy

Due to the impact of the novel coronavirus infection, foreign tourists have decreased, causing the tourism industry to stagnate. On the 15th, a mid-sized hotel in Jung-gu, Seoul, posted a closure notice and locked its doors. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Jo In-kyung] The Seoul Metropolitan Government has decided to expand support by mayoral authority for small business owners who are unpaid leave workers or have had to close stores visited by confirmed COVID-19 patients, falling into blind spots of government measures amid the novel coronavirus (COVID-19) crisis. To revive frozen consumer sentiment, consumers purchasing Seoul Sarang Gift Certificates will receive greater discount benefits than usual.

On the 29th, Seoul announced the launch of the 'Seoul Emergency Economic Countermeasures Task Force (TF),' the control tower for the economic sector to overcome the emergency economic situation caused by COVID-19, and the full-scale implementation of the '2nd Livelihood Economy Measures.'

The Emergency Economic Countermeasures TF will play a role similar to the Seoul Disaster and Safety Countermeasures Headquarters, which oversees quarantine measures, by preparing and overseeing proactive responses to restore the livelihood economy affected by the COVID-19 economic crisis. The TF will be led by the First Deputy Mayor of Seoul and plans to hold its first full meeting in early April.

The 2nd Livelihood Economy Measures are strengthened follow-up measures compared to the first measures announced last month when local economic damage due to COVID-19 began to intensify. The focus is on injecting emergency funds into small business owners, SMEs, and vulnerable workers facing difficulties, and easing the tightly blocked local economy.

To support unpaid leave workers at small businesses with fewer than five employees, those who have been on unpaid leave for five days or more since the COVID-19 alert was raised to a serious level on the 23rd of last month will receive up to 500,000 KRW per month for two months. Support will be provided for at least 25,000 unpaid leave workers, one per small business, and up to two per business in the severely affected tourism industry.

For 500 small business owners and franchisees who had to close their stores after visits by confirmed patients, damage support payments of up to 1.95 million KRW for five days (390,000 KRW per day: 150,000 KRW rent, 240,000 KRW labor costs) will be provided.

Emergency management funds currently supporting COVID-19 affected companies will be offered at low-interest rates in the 1% range depending on the extent of damage. To improve working conditions for call center workers, a high-risk group vulnerable to infectious disease spread, small businesses with fewer than 50 employees will receive up to 5 million KRW for purchasing partitions and quarantine supplies.

Additionally, consumer benefits for Seoul Sarang Gift Certificates will be increased up to 20% (15% special discount + 5% cashback) to encourage purchases, and the issuance amount has been expanded from the originally planned 30 billion KRW to 50 billion KRW.

For about 1,000 travel agencies in Seoul hit hard by the decline in tourists, 5 million KRW in investment funds for recovery will be provided, and 225 performance groups whose shows were canceled will be selected to receive around 20 million KRW each for planning and production costs.

Furthermore, rent will be uniformly reduced for 9,106 small business stores operating in public shopping centers owned by the city and its affiliated organizations. The city will also expedite construction costs that can be executed at the Seoul city level, shorten subcontract payment periods, and expand advance payments for public procurement.

Seoul plans to immediately inject 91.5 billion KRW through the 'COVID-19 supplementary budget' and accelerate the implementation of these measures by executing budgets available at the city level as early as possible.

Mayor Park Won-soon of Seoul said, "As the livelihood economy is facing unprecedented difficulties due to the prolonged COVID-19 situation, Seoul will be a pillar of support so that small and medium enterprises, self-employed individuals, cultural artists, and tourism industry workers can endure and overcome this period well."