"A Very Difficult Period Is Approaching"... Democratic Party Begins Crisis Response Consensus

Democratic Party Livelihood Economy Special Committee 'Economy is Democratic Party' Monthly Seminar
Opposition Discusses Budget, Household Debt, Corporate Restructuring, and Personal Rehabilitation

Professor Kim Young-ik of Sogang University is giving a lecture on recent economic issues at the "Democratic Party of Korea Members of the National Assembly Economic Seminar - The Economy is Democratic Party!" seminar held at the National Assembly on the 9th. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Naju-seok] On the 9th, the Democratic Party of Korea held an economic seminar to assess the ongoing economic crisis, sharing the current economic situation and raising voices that issues such as household debt, next year's budget review, and corporate restructuring plans need to be examined.

At the National Assembly that day, the Special Committee on Livelihood Economy held a monthly seminar titled "Economy is the Democratic Party," featuring lectures by Professor Kim Young-ik of Sogang University Graduate School of Economics, known as Korea's "Dr. Doom," and Democratic Party lawmaker Hong Sung-guk.

At the event, Professor Kim stated, "Since 2010, the global economy has recovered, but the debt of economic agents such as governments, corporations, and households has increased significantly," adding, "In advanced countries, government debt as a percentage of Gross Domestic Product (GDP) rose from 76% in 2008 to 136% in 2020, and in emerging countries, corporate debt increased from 58% in 2008 to 121% in 2020," warning that "a very difficult period is approaching."

Park Hong-geun, the floor leader of the Democratic Party of Korea, attended the 'National Assembly Members Economic Seminar - The Economy is Democratic Party!' seminar held at the National Assembly on the 9th, and is seen talking with Kim Tae-nyeon, the chairman of the party's Livelihood Economy Crisis Countermeasures Committee. Photo by Yoon Dong-joo doso7@

He introduced the severity of the economic crisis faced by the United States and South Korea, saying, "No country has corporate or household debt as high as ours," and pointed out, "Since government debt is relatively low, the government has no choice but to spend money well." He also proposed measures such as redenomination (currency unit reduction) as a consumption stimulus.

Democratic Party lawmaker Hong Sung-guk, who serves as the special committee's secretary, introduced the risks of household debt and the liquidity crisis in the bond market, stating, "Household debt could act as a trigger, and project financing and unsecured loans could escalate into a crisis," adding, "Savings banks, especially regional savings banks, are in difficult situations and need to be inspected."

Regarding next year's budget currently under review by the National Assembly, Hong said, "The economic growth forecast for next year is 2.5%, which has not changed from the current level," and pointed out, "There are talks that this figure will sharply drop to 2.1% or even lower." He added, "The budget presented is a tightening budget amid an economic downturn," and said, "Former and current presidents of economic associations also predict a recession, so the argument to increase the budget is not problematic at all." He emphasized the need for an active fiscal role in budget review.

He expressed the view that emphasis should also be placed on industrial restructuring and personal debt adjustment issues. Lawmaker Hong said, "The special committee has not yet reached an answer regarding corporate restructuring," but introduced, "However, the Moon Jae-in administration prepared a 20 trillion won scale Industrial Stability Fund." He continued, "There are parts related to chain debt that need to be addressed promptly legislatively," and urged, "Lawmakers interested should prepare countermeasures."

Kim Tae-nyeon, chairman of the special committee, told this outlet in a phone interview, "Because of the economic crisis, the seminar was held with the intention of reaching consensus among party members," and explained, "Once consensus is somewhat achieved, measures can be proposed." The special committee plans to hold monthly seminars under the title "Economy is the Democratic Party" for party lawmakers going forward.