[2020 Future Business Forum] Former Minister Hong Seok-woo of the Ministry of Knowledge Economy: "Support for Self-Employed and Businesses Must Be Strengthened"

"Excessive Support Needed for Economic Agents"
"Overlapping Support and Side Effects Are the Right Direction"
"Population Decline Could Be a More Serious Issue Than the COVID-19 Crisis"

Hong Seok-woo, Chairman of the Industrial Strategy Research Foundation, is giving a lecture at the '2020 Asia Future Business Forum' held on the 28th at the Chosun Hotel in Jung-gu, Seoul, under the theme "The Direction of the Korean Economy in the COVID-19 Pandemic Era." Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Hwang Yoon-joo] Former Minister Hong Seok-woo (Chairman of the Industrial Strategy Research Foundation) stated on the 28th that greater support than the current level is necessary to revive economic agents struggling due to the COVID-19 pandemic. He emphasized that only by accepting possible overlapping support and side effects in this process can we escape the quagmire of the economic crisis.

On the morning of the 28th, at the '2020 Asia Future Enterprise Forum: Our Economic Direction in the COVID-19 Pandemic Era' held at the Chosun Hotel in Jung-gu, Seoul, former Minister Hong said, "To revive the collapsed economic agents early, excessive measures must be implemented, and overlapping or side effects must be tolerated."

Former Minister Hong said, "The government is currently providing relief funds for the underprivileged and liquidity support for companies, but these efforts need to be pursued more strongly," adding, "The priority is to save (the economic agents) first."

He mentioned that since the COVID-19 crisis is unprecedented, no one knows what effect the current policies will have. Unlike the global financial crisis of 2008, the COVID-19 crisis came suddenly without warning signs, so it is important for the government to quickly support economic agents.

In particular, former Minister Hong stressed that it is even more important to start drawing a big picture now regarding the direction of domestic industries after the COVID-19 crisis.

He said, "When a major crisis occurs, the competitiveness rankings change, and this is important," adding, "With the economic foundations of other countries shaking, if Korea responds swiftly, it will have an opportunity to make a strong impact on the global economic stage."

He also stated that the government's new policy direction and innovative deregulation over the next two to three years will be extremely important for domestic industries and the economy.

Former Minister Hong said, "When COVID-19 cases surged, the Ministry of Food and Drug Safety quickly approved some healthcare equipment through separate procedures and allowed limited remote medical diagnosis," emphasizing, "Innovative deregulation should be implemented in the future as it was in response to COVID-19."

Especially, former Minister Hong warned that the population decline issue is as urgent as the COVID-19 crisis. As of 2019, South Korea's total fertility rate was 0.92, the lowest in about 50 years since recording 4.53 in 1970. Accordingly, the population supported by one Korean increased from 0.2 to 0.4, and is expected to rise to 0.67 by 2035. If the population decline trend continues as it is, the dependent population per person will exceed one by 2059.

Former Minister Hong pointed out, "With such a fertility rate, we should have a greater sense of crisis than COVID-19, but Korea is too quiet," adding, "Because the social and economic problems caused by population decline will not occur during the current term, all previous governments have not taken it seriously."

He continued, "The disaster relief fund is paid at 1 million won per household based on a family of four, but families of five or six receive the same amount," and said, "This means that the National Assembly and government, which formulate policies even in disaster situations like COVID-19, have no population policy."

Former Minister Hong further emphasized, "The urgent issue to discuss for the future of Korean industry and companies is the population problem," and "The COVID-19 crisis should be an opportunity to seriously discuss population decline policies."