24.6 Trillion Won in Support for Small Businesses and Jobs
70% of Large-Scale Investment Projects to Be Ordered in the First Half
Early and Expanded Allocation of Adjustment Grants to Autonomous Districts
Seoul City announced on the 26th that it will execute 24.6 trillion won, which is more than 60% of this year's budget of 39.54 trillion won, in the first half of the year. With the three major adversities of low growth, high inflation, and employment shock overlapping, causing a prolonged domestic demand slump, the city plans to expedite projects that have an economic stimulus effect.
First, the focus is on support for small business owners. Seoul City advanced its usual early-year support plan announcement by about two months, announcing it in November last year, and began immediate support from January 2 this year. The 2.1 trillion won scale of quick, simple, long-term, and low-interest funds for small and medium-sized enterprises has been injected since the 2nd of last month. The purpose is an immediate remedy for small and medium-sized enterprises and small business owners facing a livelihood cliff due to the prolonged economic downturn.
Amid domestic and international adversities such as economic recession and sluggish domestic demand, the number of small business closures is rapidly increasing. On the 26th, vacant stores lined a commercial area in Sinchon, Seoul. Accordingly, the amount of small business closure mutual aid payments exceeded 1.3 trillion won this year, marking an all-time high. Photo by Jo Yongjun
In particular, to support small business owners who have been hit hard by the prolonged domestic demand slump and consumption contraction, a new 'Emergency Economic Recovery Fund' worth 200 billion won was established, and the existing 'Quick Dream Fund' for low- and medium-credit borrowers was expanded to include low-income and socially vulnerable groups. The 'Emergency Self-Employment Fund' was also increased by 20 billion won compared to the previous year, and the 'Hope Companion Fund,' a refinancing loan product, is also in operation.
To prevent small and medium-credit small business owners who find it difficult to get loans from primary financial institutions from being pushed into high-interest second- and third-tier financial sectors, a 'Safe Account' in the form of a negative balance account will be introduced by the end of March. It allows for the withdrawal and deposit of necessary amounts at any time with an interest rate of about 5%, which is lower than the average interest rate of negative loans from commercial banks, thereby reducing interest burdens.
The Metropolitan Seoul Love Gift Certificates will also be issued in full within the first quarter, totaling 149.5 billion won, to invigorate the local economy. To restore sharply contracted consumer sentiment, 75 billion won was issued first on January 8 before the holidays, and the remaining 74.5 billion won will be fully issued by March to further support the recovery of neighborhood commercial districts.
This year, a special measure was also taken to quickly provide 80% of direct and indirect jobs in the first half of the year. By concentrating 2.7 trillion won in the budget, the city plans to implement comprehensive job policies covering not only youth but also middle-aged, older adults, and vulnerable groups.
In the first half, 115 investment projects worth more than 5 billion won each (totaling 1.6409 trillion won) will be executed early. This accounts for 64.7% of the related budget (2.5363 trillion won). Large-scale construction projects, which have a high citizen impact and job creation effect, are representative. In addition, 70% of service and construction work in safety and infrastructure sectors will be ordered early within the first half.
Furthermore, to ensure smooth financial support for autonomous districts and public corporations and foundations, which are at the forefront of people's livelihoods, adjustment grants will be executed early. The city will hold early execution inspection meetings for autonomous districts to actively encourage prompt execution and will check and resolve difficulties in projects with slow execution. Kang Seok, Seoul City's Financial Planning Officer, said, "We will not miss the golden time for economic rebound by swiftly executing the first half budget for large-scale investment projects with high economic stimulus effects, job creation directly linked to the livelihood of ordinary people, and small business owners in crisis," adding, "We will do our utmost so that citizens can feel the recovery of the livelihood economy."
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