'250,000 Won for All Citizens' Proposed by Lee Jae-myung... Populism VS Universal Welfare

250,000 Won Per Person... Will Spending 13 Trillion Won Revive the Economy?
Lee Jae-myung's Universal Welfare... "Small Change Compared to Annual Budget"
Experts Say "Lacks Specificity" "Strategic Populism"

Lee Jae-myung, leader of the Democratic Party of Korea, proposed a 'Livelihood Recovery Support Fund' that would provide 250,000 KRW per person to all citizens ahead of the general election. Although this plan is based on the 'universal welfare' concept he prominently advocated as Gyeonggi Province governor and presidential candidate, it has drawn criticism as 'populism' given the timing before the election.

According to the Democratic Party on the 25th, Lee Jae-myung stated the day before at the Saemaeul Traditional Market in Jamsil, Songpa-gu, Seoul, "It is time for a 'cardiopulmonary resuscitation' of the livelihood economy that increases consumption through household income support and restarts the stalled economy," adding, "I propose providing a 'Livelihood Recovery Support Fund' of 250,000 KRW per person and an average of 1 million KRW per household to all citizens. Let’s distribute it as local currency like the disaster relief funds."

Democratic Party leader Lee Jae-myung is appealing for support on the 24th during his visit to Jamsil Saemaul Traditional Market in Songpa-gu, Seoul. [Image source=Yonhap News]

The Democratic Party has set the keyword for this general election as 'judgment' and is focusing on highlighting the government's economic mismanagement. When Lee criticized the government’s response to high inflation and proposed the support fund, cheers erupted at the scene. Lee’s 'Livelihood Recovery Support Fund' suggests giving 250,000 KRW each to all 51.32 million people nationwide (based on resident registration population) and an additional 100,000 KRW each to 3 million basic livelihood security recipients and lower-income groups.

Lee Jae-myung stated that the required budget for this policy is 13 trillion KRW, which he likened to 'small change.' He argued, "Compared to the 900 trillion to 1,000 trillion KRW spent on the rich tax cuts distributed by the Yoon Seok-youl administration and the deceptive populist pledges revealed at the livelihood debate without livelihood, this is just a drop in the bucket." At a campaign rally in Yeongdeungpo-gu, he said, "Compared to the annual budget of 680 trillion KRW, giving 1 million KRW per household with just 13 trillion KRW is like small change. This money circulates as people go shopping in their neighborhoods, which revitalizes the economy," adding, "You ignorant folks, this is how it works."

However, the method to secure the funding remains unclear. When asked how the funds would be raised, Lee replied, "The funds come from the people's taxes." He added, "Then you might ask what to do if there is no money; we can issue government bonds or adjust the existing budget." Nonetheless, regardless of the feasibility of this plan, the decision to provide the support fund after the general election lies with the Yoon Seok-youl administration.

Democratic Party leader Lee Jae-myung visited Jamsil Saemaeul Traditional Market in Songpa-gu, Seoul on the 24th, greeted citizens, and held an on-site press conference. From left to right: Nam In-soon (Songpa-byeong), Song Ki-ho (Songpa-eul), Leader Lee, Jo Jae-hee (Songpa-gap).
[Image source=Yonhap News]

Since this proposal came less than three weeks before the general election, it has also been criticized as 'populism.' In the past, the Moon Jae-in administration announced the first COVID-19 disaster relief fund payment plan 12 days before the 21st general election, providing 400,000 KRW for single-person households and 1 million KRW for households of four or more, drawing criticism as a 'vote-buying act.' Ahead of the Seoul and Busan by-elections in April the following year, the administration also faced opposition from opposition parties by distributing the fourth disaster relief fund from late March.

Professor Shin Yul of Myongji University’s Department of Political Science and Diplomacy criticized, "The Democratic Party’s claim that 900 trillion to 1,000 trillion KRW is required for the government’s announced policies does not clarify whether this amount is for one year or spread over ten years," adding, "They need to present a concrete implementation plan specifying which welfare budgets will be reduced by the amount spent on the support fund."

There is also a view that Lee Jae-myung’s support fund proposal is a strategic judgment. Professor Kim Seong-su of Hanyang University’s Department of Political Science and Diplomacy evaluated, "(Lee’s proposal) is clearly populism, but from an election strategy perspective, it can create the perception that the Democratic Party stands with the common people while criticizing the government and ruling party’s tax cuts for the rich."