[Seoul, Now] Supporting Local Governments' All-Out Efforts for Livelihoods

Local Leaders Closest to Grassroots Sentiment
Pointing to Livelihood Issues as the Core
People Will Remember the True Face of the Elite

Last week, about 10 autonomous districts in Seoul held New Year's greeting meetings. It was an occasion to exchange New Year's wishes and greetings, where the host district mayor informed residents of the achievements of the past year and plans for the coming year. The atmosphere this year is calmer than ever. The originally planned performances and music were hastily changed. Some district offices postponed or canceled their events.

Among elected officials, the heads of basic local governments know the grassroots public sentiment best. Although they receive party nominations when running for office, they cannot distinguish between supporters of different parties when working. Their position is different in nature from that of lawmakers who cling to their support base and are swayed by party lines.

They live on-site morning and evening throughout their terms. They are well aware of local circumstances. The most common phrase district mayors hear these days is "It's too hard to make a living. We feel insecure." This is why revitalizing the local and livelihood economy is the top urgent policy priority for the new year.

The most representative policy is the gift certificate (local currency) program. Most districts start sales this week. Gangnam-gu issues 30 billion KRW worth of gift certificates entirely from its own budget. It offers a 5% discount rate on the certificates and runs a permanent payback event providing an additional 5% benefit. For example, buying a 500,000 KRW face value certificate for 475,000 KRW and using it results in a 25,000 KRW refund, effectively allowing one to purchase a 500,000 KRW certificate for 450,000 KRW.

Seongbuk-gu also issues 40 billion KRW worth of certificates, similarly expanding the final discount rate to 10%. Issuing gift certificates is a financially burdensome project. However, districts are competing to increase issuance amounts because there are few projects that can produce immediate effects during a recession. Although the structure is simple, the trickle-down effect on the local economy is clearly visible in real time.

When Gangnam-gu held a payback event for two months in the second half of last year, the average monthly purchase amount increased by 1.8 times compared to usual, and gift certificate usage doubled. In September 2020, over 1,100 COVID-19 infections occurred in a cluster after Sarang Jeil Church ignored government recommendations and held services. Many shops in Jangwi-dong, Seokgwan-dong, and Wolgok-dong in Seongbuk-gu were on the verge of collapse. The ‘Jangseokwol’ (Jangwi, Seokgwan, Wolgok) local gift certificates specially issued at that time saved the area from this crisis.

Since the Yoon Suk-yeol administration took office, the gift certificate discount rate, which was 10% until the year before last, has been gradually reduced to 7% and then 5% due to budget cuts. Seoul City also reduced support accordingly. From the second half of last year, Seongbuk-gu, Yongsan-gu, Gangnam-gu, and others gathered their own budgets to conduct payback events, achieving significant consumption stimulation effects. The total issuance amount of districts, which had decreased, is now increasing again.

In Seocho-gu and others, measures such as revitalizing commercial districts, loans from the Small and Medium Enterprise Development Fund for SMEs and small business owners, and low-credit and unsecured loans were announced this week. In Eunpyeong-gu, the district mayor is encouraging related and professional organizations that were effective during the COVID-19 pandemic to make advance payments. The number of days the district office cafeteria is closed has also been increased to encourage employees to eat out.

Local government heads said, "We will do everything we can." The limits of authority and budget are clear, but they are the sustaining force nonetheless. A sense of helplessness that law and common sense may not apply suppresses the will to strive, and an indescribable anxiety sometimes arises. These days, it is felt that politics and economy, state and market cannot be explained separately. As long as the opportunistic behavior of elites and social leaders continues, the livelihood economy will find it difficult to escape danger. People will remember that responsibility comes with the size of authority.