"Speed is Life"... 3rd Disaster Relief Fund Likely to Be Distributed Before Year-End

Targeted Support for Small Business Owners... Differential Assistance by Industry Planned

The economic downturn for self-employed individuals continues as negative factors such as external environmental uncertainty and rising oil prices overlap. On the 4th, a store in the underground shopping center near Gangnam Station in Seoul hung a notice announcing its closure and operated on its last day. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jang Sehee] The government and the ruling party are pushing for a plan to provide a third round of disaster relief funds worth 2 to 3 trillion won in response to the resurgence of the novel coronavirus infection (COVID-19). They have decided to selectively support small business owners and others affected by COVID-19.

According to the government and ruling party on the 28th, the main point of the current third disaster relief fund plan is targeted support for small business owners. A ruling party official stated, "It seems difficult to distinguish households with sharply decreased income," adding, "The direction will be to support self-employed and small business owners who suffered damage due to the elevation of social distancing to level 2." However, depending on political discussions, the scope of recipients such as caregivers may increase.

Since speed is crucial for support funds responding to COVID-19, a plan to provide them before the end of the year is being actively considered. Selective support was already provided mainly to small self-employed businesses whose sales sharply declined in September, so there are no significant systemic difficulties. In fact, during the targeted support for self-employed and small business owners in September, payments began about a month after the supplementary budget was passed.

Furthermore, in the situation where social distancing measures are repeatedly eased and tightened, support is expected to be differentiated by industry. It is analyzed that it would be unfair for small business owners who did not experience a sharp income drop or were not affected to receive benefits.

In this regard, experts emphasize that to make the third disaster relief fund effective, targeted support should be given to low-income groups and small business owners. Professor Sung Tae-yoon of Yonsei University’s Department of Economics said, "Providing cash support to vulnerable groups and self-employed people will have the effect of boosting some consumption."

Meanwhile, discussions on the third disaster relief fund accelerated immediately after Lee Nak-yeon, leader of the Democratic Party of Korea, said, "I hope to find a way with the government to reflect support measures for vulnerable groups in next year's budget and to consult with the opposition party."