Gangdong-gu Implements Comprehensive Measures to Revitalize Local Economy Recovering from COVID-19

Comprehensive Economic Revitalization Measures Tailored to Local Conditions: 27 Projects in 4 Areas... Collaboration with Government and Seoul City Plus Unique Support Plans by Gangdong-gu... Expansion of Gangdong-gu SME Development Fund, Emergency Rent Support for Angel Workshop, Priority Hiring of Local Residents at Construction Sites, Traditional Market 3-Day Event, etc.

[Asia Economy Reporter Park Jong-il] As the unprecedented crisis caused by COVID-19 deepens, the impact on the local economy is becoming more severe.

In response, Gangdong-gu (District Mayor Lee Jeong-hoon) has established and is implementing a “Comprehensive Plan for Revitalizing the Local Economy” to support small business owners, SMEs, furloughed workers, and the unemployed who are the first to feel the economic hardships firsthand.

It was judged that in order to revive the shrinking local commercial districts and restore frozen consumer sentiment, it is important to prepare an all-encompassing comprehensive plan, systematically allocate key initiatives, and create synergy effects.

So far, the district held an “Emergency Countermeasure Meeting chaired by the District Mayor for Local Economic Revitalization” in February to prepare response policies amid concerns about the impact of the collapsed real economy on the local community due to COVID-19. It also launched a large-scale “Rent Reduction Campaign” for small business owners, resulting in over 1,157 stores with reduced rent and 414 participating landlords, achieving notable outcomes.

According to the comprehensive plan, Gangdong-gu will promote a total of 27 projects in four areas: △ overcoming recession damage through support for small business owners and SMEs △ job support △ revitalizing local commercial districts through consumption promotion △ economic stimulus through rapid execution in the public sector.

This effort was made in close coordination with the government and Seoul City to discover support measures tailored to the conditions of Gangdong-gu, and customized, practical support plans will continue to be prioritized in the future.

First, in the area of overcoming recession damage through support for small business owners and SMEs, the Gangdong-gu SME Development Fund, which provides low-interest loans to SMEs and small business owners facing financial difficulties, will increase its loan scale from 3 billion KRW to 3.5 billion KRW this year, and interest repayment will be waived from the previous 1.8%. However, loans are limited to 50 million KRW per company and the program is temporary, running from May to December, so caution is advised.

Additionally, labor law and psychological counseling will be provided to small business owners who are relatively vulnerable to labor laws, offering individual and specific consultations on labor law issues as well as counseling to alleviate psychological difficulties. There is also support for small business owners and franchisees who suffered damages such as quarantine and business suspension after visits by confirmed COVID-19 cases, covering rent and labor costs incurred during the suspension period.

Furthermore, to alleviate the actual financial burden of young small business owners in the local Angel Workshop, an emergency support project will provide 35% of the rent for the Angel Workshop building for three months.

The support period is three months from April to June 2020, targeting 13 Angel Workshop locations that have been tenants for over one year and currently do not receive rent support.

Other measures include △ promoting rent reductions for small business owners by discovering “Good Landlords” △ local tax support such as deferral of local tax payments △ support for disinfection and sterilization inside and outside commercial buildings △ expanded parking support such as large bus parking fee reductions.

In the job support area, to prevent unemployment and maintain livelihoods for workers at small business establishments with fewer than five employees who are in blind spots of support despite business difficulties, the district provides △ employment retention subsidies for unpaid leave workers at small businesses and △ has expanded public jobs by hiring an additional 53 people.

Also, the district implements a policy prioritizing the hiring of local residents for workers at medium and large construction sites within the district. Approximately 70 people are expected to be employed this year as site maintenance staff, safety personnel, and simple laborers.

In the area of revitalizing local commercial districts, the Gangdong Love Gift Certificate, a key tool for promoting local consumption and increasing sales for small business owners, will be promoted with a 15% discount available from March 23 until the budget is exhausted.

Additionally, starting in April, the Gangdong-gu Office cafeteria, which serves about 500 people daily, will close every Friday to help revitalize local restaurants.

Especially, after the COVID-19 situation eases, to revitalize traditional markets, Gangdong-gu plans to hold a three-day market event, the first in Seoul, where six traditional markets in the district gather to set up sales and food booths. It will also promote a win-win street creation project to revitalize local commercial districts through creative and distinctive street designs.

Other initiatives include △ providing lunchboxes to vulnerable groups together with young small business owners △ issuing consumption coupons to low-income groups △ promoting flower consumption campaigns △ flexible enforcement of parking violations △ encouraging related organizations and facilities to use local commercial districts and prioritizing purchases from local businesses.

Finally, in the first half of 2020, the district plans to stimulate the economy through rapid execution of local finances, including swift contract signing and payment processing.

Lee Jeong-hoon, Mayor of Gangdong-gu, stated, “This is an unprecedentedly difficult time, and many people have suffered unwanted damages. The scope of damage is expanding from low-income groups and small business owners to companies, increasing in scale. Therefore, we have established and are implementing a comprehensive plan to revitalize the local economy. We will continuously prepare practical measures to serve as a solid support for our residents.”