'Basic anti-disaster income' can be viable option in COVID-19 era
The South Korean government and political parties are apparently becoming more positive about providing a certain amount of money to all citizens ― or households ― in the form of "basic anti-disaster income" as part of emergency economic measures.
This is no longer an unrealistic idea here as the United States and Japan, among other nations, are reportedly taking steps to introduce similar measures to boost spending and support marginalized households amid fears of economic meltdown caused by the spread of the novel coronavirus. In particular, the Donald Trump administration is seeking to send a $1,000 check to every American to spur spending.
These payments have important benefits. First, it is the simplest and quickest way to provide an economic boost in times of crisis. Further, the basic income could be the most viable option to protect low-income families and mom-and-pop stores from the fallout of COVID-19 ― at least for some time.
On Tuesday, the National Assembly approved the government's 11.7-trillion-won ($9.42 billion) extra budget plan, but this is mainly centered on covering expenditures for anti-disaster efforts being made by central and local governments as well as providing financial support for small and mid-sized enterprises. It is widely anticipated that the administration will have to draw up a second supplementary budget plan in the near future as the rapid spread of COVID-19 worldwide has sparked fears of an L-shaped recession. Whether or not the government should include a basic anti-disaster income in the future additional budget plan is already a major topic of debate among politicians and economists.
In fact, some municipal governments led by liberal mayors and governors have already introduced their own basic income plans in the face of the COVID-19 crisis to protect people from going bankrupt. The government of the southwestern city of Jeonju plans to pay some 520,000 won ($430) per person to some 50,000 citizens in the form of a debit card next month. The money should be spent only within the city in three months. Seoul and Gyeonggi Province are also moving to follow suit to implement similar programs.
On Wednesday, former Prime Minister Lee Nak-yon, now heading the ruling Democratic Party of Korea's special committee on COVID-19 response, welcomed the introduction of anti-disaster basic income by municipal governments, saying he expects the central government to include supportive measures and its own programs in the future additional budget plan. Hwang Kyo-ahn, chairman of the main opposition United Future Party, also said Tuesday he is not opposed to introducing such a measure for marginalized households.
So far, some conservative politicians have brushed off the idea as being "political" or "populist" apparently out of concerns about possibly impacting the upcoming April 15 general election. However, the situation will change once the election is over, and adverse economic effects of COVID-19 become more apparent. Basic income payments can be effective in increasing domestic demand and production, boosting tax revenue and thus creating a virtuous economic cycle.
The South Korean government and political parties are apparently becoming more positive about providing a certain amount of money to all citizens ― or households ― in the form of "basic anti-disaster income" as part of emergency economic measures.
This is no longer an unrealistic idea here as the United States and Japan, among other nations, are reportedly taking steps to introduce similar measures to boost spending and support marginalized households amid fears of economic meltdown caused by the spread of the novel coronavirus. In particular, the Donald Trump administration is seeking to send a $1,000 check to every American to spur spending.
These payments have important benefits. First, it is the simplest and quickest way to provide an economic boost in times of crisis. Further, the basic income could be the most viable option to protect low-income families and mom-and-pop stores from the fallout of COVID-19 ― at least for some time.
On Tuesday, the National Assembly approved the government's 11.7-trillion-won ($9.42 billion) extra budget plan, but this is mainly centered on covering expenditures for anti-disaster efforts being made by central and local governments as well as providing financial support for small and mid-sized enterprises. It is widely anticipated that the administration will have to draw up a second supplementary budget plan in the near future as the rapid spread of COVID-19 worldwide has sparked fears of an L-shaped recession. Whether or not the government should include a basic anti-disaster income in the future additional budget plan is already a major topic of debate among politicians and economists.
In fact, some municipal governments led by liberal mayors and governors have already introduced their own basic income plans in the face of the COVID-19 crisis to protect people from going bankrupt. The government of the southwestern city of Jeonju plans to pay some 520,000 won ($430) per person to some 50,000 citizens in the form of a debit card next month. The money should be spent only within the city in three months. Seoul and Gyeonggi Province are also moving to follow suit to implement similar programs.
On Wednesday, former Prime Minister Lee Nak-yon, now heading the ruling Democratic Party of Korea's special committee on COVID-19 response, welcomed the introduction of anti-disaster basic income by municipal governments, saying he expects the central government to include supportive measures and its own programs in the future additional budget plan. Hwang Kyo-ahn, chairman of the main opposition United Future Party, also said Tuesday he is not opposed to introducing such a measure for marginalized households.
So far, some conservative politicians have brushed off the idea as being "political" or "populist" apparently out of concerns about possibly impacting the upcoming April 15 general election. However, the situation will change once the election is over, and adverse economic effects of COVID-19 become more apparent. Basic income payments can be effective in increasing domestic demand and production, boosting tax revenue and thus creating a virtuous economic cycle.
