[Comparison of Lee and Yoon's Pledges] Lee's 'Compensation for Losses and Local Currency' vs Yoon's '50 Trillion Won Focused Support in 100 Days'

Presidential Candidates' Economic Revitalization Plans After COVID-19

Lee Jae-myung, Democratic Party of Korea Presidential Candidate

Reflecting the Political Philosophy of 'Eokgangbuyak'

Alleviating Rent Burden for Self-Employed

The economic policy direction and content advocated by Lee Jae-myung, the Democratic Party of Korea's presidential candidate, can be summarized as follows. Candidate Lee diagnoses that economic unfairness and inequality in our society are severe. As a solution, he proposes government-led growth. At the same time, he aims to reduce polarization by increasing redistribution to socially vulnerable groups. This reflects Lee's political philosophy of ‘Eokgangbuyak’ (suppressing the strong and helping the weak).

◆An Economy Focused on the 'Eul' (the Weaker Party)... Emphasis on Loss Compensation and Local Currency

The ‘economy for the weak’ that Lee pursues is well reflected in his pledges preparing for the post-COVID-19 era. Judging that difficulties for self-employed and small business owners will continue even after the pandemic subsides and the economy improves, he proposed alleviating their rent burdens. He also pledged to prohibit contract termination, refusal to renew, and forced eviction due to rent arrears. The ‘Good Landlord Movement,’ set to expire at the end of the year, is planned to be extended.

Among Lee’s ‘three major budgets’ for COVID-19 measures, the universal disaster relief fund was scaled back due to opposition from the ruling party and government, but the ‘Loss Compensation Act’ and ‘local currency issuance’ remain emphasized. The scope of the Loss Compensation Act, revised in July, will be expanded, and local currency issuance will be increased. In particular, the Democratic Party plans to significantly increase the local currency scale in next year’s budget from the existing 6 trillion won to over 21 trillion won, bolstering the ‘Lee Jae-myung local currency’ initiative.

Lee also expressed willingness to cooperate with the 50 trillion won small business support plan proposed by Yoon Seok-youl, the People Power Party’s presidential candidate. Regardless of political gains or losses, he intends to demonstrate a readiness to immediately start necessary work for the people without being constrained by timing or methods.

[Image source=Yonhap News]

◆As the Election Nears, Shift from Fairness to Growth

Before entering the full-scale presidential election phase, Lee presented ‘transitional fair growth’ as his economic policy direction, emphasizing ‘fair’ growth. However, he appears to be gradually shifting the policy focus toward ‘transitional growth.’ Initially concentrating on basic income and welfare expansion based on the philosophy of Eokgangbuyak to solidify his core supporters, he now seems to be focusing more on securing votes from undecided voters. The ongoing COVID-19 economic crisis and public interest increasingly focusing on growth likely influenced this shift. Nonetheless, his consistent ‘implementation strategy’ remains a big government approach.

Lee talks about government-led infrastructure development to revitalize the economy after COVID-19. At the Democratic Party’s campaign committee inauguration on the 2nd, he mentioned the Gyeongbu Expressway and pledged “unprecedented large-scale rapid national investment.” He announced ‘Digital Transformation’ as the campaign committee’s first pledge, presenting an investment plan totaling 135 trillion won over five years, including 85 trillion won in national funds (30 trillion for infrastructure investment, 40 trillion for digital transformation of traditional industries, and 15 trillion for digital sovereignty assurance). However, some criticize this as a strategic shift aimed at enhancing competitiveness in the final election. Um Kyung-young, director of the Era Spirit Research Institute, said, “They are emphasizing growth to expand to the center and attract young voters, but whether this is a tactical slogan for votes or a sincere pledge remains to be judged.”

Yoon Seok-youl, People Power Party Presidential Candidate

Small Business Support for 'Recovery,' Not Just 'Survival'

Expansion of Wage-Payment Training System for Re-Entrepreneurship and Reemployment

Regarding the philosophy of distributing fruits of labor?selective versus universal?Yoon Seok-youl, the People Power Party’s presidential candidate, clearly follows his party’s stance. The economic policy directions upheld by the Democratic Party and People Power Party are distinctly reflected in the candidates’ pledges. For post-COVID-19 support measures, Yoon emphasizes selective support. He believes that support focused on small business owners and self-employed is necessary for ‘recovery,’ not just ‘survival.’

◆Support Goes Where Damage Exists

After being nominated as the People Power Party’s presidential candidate, Yoon proposed the ‘100-Day Emergency COVID-19 Rescue Program’ as his first pledge. This plan involves injecting 50 trillion won within 100 days after the new government’s inauguration to compensate small business owners for damages caused by current government’s business restrictions. However, considering that Lee Jae-myung’s universal disaster relief fund would have required an additional 10 to 13 trillion won in revenue, Yoon’s 50 trillion won plan has faced criticism as ‘even more excessive money distribution.’ Nonetheless, Yoon believes that focused support can maximize the effect of ‘pulling up from the cliff.’ Although 50 trillion won may seem large now, it is unavoidable to prevent a ‘domino bankruptcy’ that could occur without such support.

Kim So-young, professor of economics at Seoul National University and head of Yoon’s economic policy team, said, “There are about 6.5 million self-employed in Korea, many of whom have gone bankrupt due to COVID-19, and we must consider those who may go bankrupt in the future.” She explained, “If we do not spend about 50 trillion won and leave them unattended, the government will incur costs to cover guaranteed debts, banks will face problems if loans become non-performing, and unemployment insurance costs will increase as unemployment rises, resulting in much higher costs for economic recovery of self-employed.”

[Image source=Yonhap News]

◆Interest in Mid- to Long-Term ‘Strengthening of Self-Employed Resilience’

Regarding post-COVID-19 economic revitalization, Yoon emphasizes ‘mid- to long-term resilience.’ Considering Korea’s economic structure with a high proportion of self-employed, he believes proactive measures are needed to secure jobs, competitiveness, and safety nets. His pledges include credit recovery, re-entrepreneurship, and reemployment support for self-employed who have closed or are at risk of closure. Specifically, support includes 5 million won for interior and installation costs for those who closed during COVID-19 and re-enter within one year after the pandemic ends; an additional 50% support for re-entrepreneurship funds for small business owners who complete education and training; and expanding the wage-payment training system from the current 2,000 to 100,000 participants to help small business owners focus on re-entrepreneurship and reemployment preparation.

Additionally, Yoon plans to actively address job issues through self-employed innovation and enhancing small business competitiveness in preparation for accelerated non-face-to-face and digital transformation after the pandemic ends. Since creating quality jobs ultimately leads to growth, this aligns with Yoon’s emphasis on the ‘virtuous cycle of growth and welfare.’ A campaign official said, “There is a growing need to build a social safety net for self-employed and small business owners in preparation for new pandemics,” adding, “We will move toward establishing a fundamental, permanent, and practical response system to improve pandemic response capabilities.”