Four pioneering ways forward in post-COVID-19 era

Hong Nam-ki

By Hong Nam-ki

"The best way to predict the future is to create the future." This statement is rightly reflective of our time as we break through the unprecedented COVID-19 crisis while preparing against the uncertainty of the future.

A famous steakhouse in New York, Peter Luger, began delivery service for the first time in its 133 years of history. An online live concert of BTS was broadcasted in lieu of a live performance on stage, reaching 50.59 million viewership in total. These are only a few examples suggesting that COVID-19 has brought about changes in many aspects of our daily lives and economic activities.

COVID-19 is not the first pandemic in history. The history of previous pandemics such as the plague in the medieval era and the Spanish flu in the early 20th century already proved how mankind overcame and took one step further through the crisis. We will come out of this crisis and create opportunity from a time of crisis again.

In this regard, I would like to introduce Korea's response to COVID-19 and four pioneering ways forward in the post-COVID-19 era. By keeping the notion in mind that the 'economy won't sustain without proper quarantine,' Korea builds on a two-track strategy: K-quarantine and K-economic measures.
First of all, K-quarantine is a rigorous quarantine system based on "4T (Testing, Tracing, Treating, Transparency) +α." They consist of rapid testing with more than 20,000 conducted per day; fast and tight tracing for new confirmed cases; customized treatment in accordance with the severity of symptoms and transparently disclosing information on daily confirmed cases and quarantine status to put it short. As for the +α, Korea has taken advantage of its cutting-edge ICT such as COVID-19 online tracking map and the Self-Quarantine Safety Protection App, and introduced innovative testing methods such as the world's first drive-thru testing. Furthermore, citizenship such as all citizens wearing a mask made a great contribution to the success of the K-quarantine model.

Korea conducted the expansionary fiscal policy pre-emptively, which is not distinctive from other countries around the world. However, Korea excelled by taking a balanced measure between quarantine and economic activities, and without shutting down the economy completely based on K-quarantine success. In this way, Korea was able to minimize the impact of the pandemic on the economy and reach a relatively better economic performance with less fiscal input.
Nevertheless, it is no exaggeration to say that the response to the real crisis just began. Eminent economist Milton Friedman said, "Only a crisis produces real change." The COVID-19 pandemic not only poses a crisis, but an opportunity as its nature evokes fundamental and structural changes in the economy and society. It is also a chance for us to unfold a new future as we overcome the challenges. In this regard, I would like to introduce four ways that Korea will move forward to pioneer a better future in the post-COVID-19 era.

The first way is the way of connection in the contactless era. The social distancing and movement restrictions are demanding new innovation to alternatively approach connection and communication. To revive the economy in the contactless era, the Korean government is revising the current laws and systems that are based on the premise of physical contact, and is carrying out bold investments and regulatory innovation at the same time. The government is not only pursuing a smart, knowledge-based path by providing an smart secretary to the people's service, but also encourages the private sector to accelerate the establishment of a contactless economic system, such as smart medical care and contactless currency exchange by using 5G and IoT.

The second is the way towards a New Deal Economy, which will lead the future. In July, the government announced three pillars of "Korean New Deal, consisting of Digital New Deal, Green New Deal and Safety Net. The so-called K-New Deal is the National Development Strategy to become a leading economy. We plan to invest 160 trillion won ($141 billion) by 2025 to create 1.9 million jobs. Korea will pursue digital innovation by building "the data dam" and by integrating D.N.A (Data, Network, AI). Korea will promote the transition to a low-carbon, green economy by fostering the green industry and green renewable energy. In addition, we plan to promote a regionally balanced New Deal for the revitalization of the local economy and balanced growth at a fast pace.

The third is the way towards an inclusive economy, for all walks of life. We have witnessed that economic damage is even greater on vulnerable groups. It indicates that we need to secure the weakest links of society. In order to incorporate courier workers and freelancers into the social safety net, the government will establish an income verification system that includes various types of employment and work. While accelerating development of a digital and non-contact economy, Korea will address the digital divide experienced by vulnerable groups such as the self-employed and small business owners. This is because strengthening inclusiveness ensures sustainable growth in the post-COVID-19 era.

The fourth is the way towards a resilient economy, a steady state economy in any crisis. We will examine internal and external risks while reorganizing the response system. The government plans to manage household debt and the health of financial institutions so that increased liquidity during the crisis does not become a risk. The government will continually prepare against structural risks such as climate change, low birthrate and aging society. Korea will also strengthen the value chain since the virus has demonstrated its capability to impact the global value chain.

The history of humanity has been dotted with long fights against diseases since ancient times, which had triggered many societal changes. However, these fights have also served as an opportunity for a new era. The plague in Europe during the Middle Ages killed one-third of the European population, but it also ended the old feudal system and paved the way towards the Renaissance. Korea will tackle this crisis and turn it into an opportunity to advance. For this target, Korea will pave four main ways toward a connected, new deal, inclusive and resilient economy to build a better future.

Hong is deputy prime minister and finance minister.