People do not have to panic about the new coronavirus; but they do need to have a sense of crisis because the epidemic could have a much more serious impact on their lives if it lasts longer. Particularly the contagious disease could deal a severer blow to the economy, more so than any other viruses in the past.
That is why President Moo Jae-in called on his administration Tuesday to mobilize all possible means to cope with the “emergency economic situation” arising from the spreading coronavirus. He said an emergency situation requires an emergency prescription. We cannot agree more with him.
The President must have felt a correct sense of crisis about the economic consequences of the rapidly spreading virus known as COVID-19. Now he should prove his leadership by taking emergency steps not only to contain the virus, but also to prevent the economy from plunging into an abyss. This is easier said than done. Therefore, Moon and his policymakers need to go the extra mile to work out “special” measures to minimize the economic fallout from the global public health emergency.
As Moon stressed, it is important to take timely and pre-emptive measures. He spelled out these measures, including the use of state emergency funds and the frontloading of the government budget. He also called for tax incentives, financial support and regulatory reform to stimulate corporate investment and boost domestic demand. In addition, he promised to provide small- and medium-sized enterprises with generous aid.
However, the question is whether such measures are sufficient to cushion the shock from the epidemic, which is far greater than the 2002-03 severe acute respiratory syndrome (SARS) and the 2015 Middle East respiratory syndrome (MERS). Whenever the economy has shown weakness, the government has come up with deregulation, innovation, and fiscal and monetary easing. But it has failed to prop up the economy. It cannot maintain growth momentum without taking emergency steps in real terms.
Pessimism grows that the nation will not achieve its target growth rate of 2.4 percent this year. On Monday, global rating agency Moody's Investors Service lowered its 2020 growth projection for the country down to 1.9 percent from 2.1 percent.
The coronavirus, which originated in the central Chinese city of Wuhan, is taking its toll on the Korean economy which is heavily dependent on China. The domestic airline and tourism industries have already begun to feel the pain, while Hyundai Motor and other carmakers have suspended factory operations due to the disruption of the global supply chain.
The situation is getting worse. Twenty new cases of the coronavirus were reported Wednesday, raising the total number of infected patients to 51. This is escalating fears about a mass outbreak of local infections. In China, over 2,000 people have died from the virus with more than 74,000 cases of infection. The virus has continued to spread rapidly worldwide.
The outbreak has put the Moon administration to the test ahead of the April 15 general election. The government alone cannot successfully bring the virus under control. All members of our society must join the fight against the disease and fend off any economic crisis. Take emergency action before it is too late.