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[2020] Mayor’s Speech

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  • Media Briefing on <Seoul Stimulus Checks for the Self-Employed>

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    April 23, 2020

    As of 10 AM on April 23, the number of COVID-19 confirmed cases nationwide is 10,702 and there are no (zero) new confirmed cases today in Seoul. The accumulative number of confirmed cases in Seoul is 628.

    The nation’s number of daily new confirmed cases has been maintained below ten, and the number of patients released from quarantine after full recovery has exceeded 8,400 (at 8,411). For ten consecutive days, Seoul is seeing less than three new confirmed cases a day, and most of the cases are related to international arrivals.

    We are maintaining this stable condition as a result of the “social distancing” that we have practiced for the last six weeks. Specifically, Seoul preemptively initiated the “Let’s Take a Break” campaign in early March. Seoul is a megacity with 10 million citizens and has the country’s highest population density. As Seoul has more number of facilities and businesses wherein there is close contact among people than any other city, the risk of infection in Seoul is accordingly high. This is the reason Seoul has been reacting preemptively, perhaps to excess, tackling the infectious disease.

    Seoul has one of the most democratic, dynamic, and sagacious groups of citizens in the world. Their active participation in the social distancing campaign of “Let’s Take a Break” made Seoul the top city of quarantine among metropolitan cities of the world.

    However, it is too early to let our guard down. There is a risk of sudden collective infection out there. We have witnessed how one single person with the virus can quietly lead to an explosion of collective infection in the examples of Yecheon and Singapore. Thus, Seoul decided to follow the central government’s guideline to maintain the social distancing campaign until May 5.

    Nevertheless, the shadow of COVID-19 is cast so wide and deep. The public economy is facing an unprecedented state of emergency. The famine caused by COVID-19 has become an immediate reality for citizens.

    In many fields, there is evidence of economic stagnation caused by COVID-19. What is dreadful is that we do not know when this economic crisis will cease. Many experts forecast that the economic recovery will not show a v-shaped rebound that we have experienced before, but a u-shaped recovery, which means we must cross the river of hardship to reach the other side of the valley of death.

    Regardless of region and time, a disaster has distinct characteristics—it hits the weakest spot first and the hardest.

    Seoul worked preemptively in preventing the spread of the virus, and is now attempting to be preemptive in saving public welfare as well.
    To date, Seoul has taken special measures to revive the livelihoods of Seoul residents. First, the Disaster Emergency Living Expenses to save its citizens. Second, the 5 trillion won-scaled “10-Day Commitment” for public welfare and innovative financing. Third, the preparation of additional funds to enable the central government’s Emergency Disaster Relief Funds to take on 20%.
    All of these were the decisions made to save the suffering citizens in blind spots of disaster and on the verge of breakdown as well as to protect the local economy.

    So far, Seoul has compiled the supplementary budget of KRW 861.9 billion to support small business owners and households in blind spots hit by COVID-19. However, the city determined that this amount is not sufficient to cross the valley of adversity.

    Accordingly, Seoul has made the fourth decision to cross the river of hardship with Seoul citizens. It is that the city will provide “Seoul Stimulus Checks for the Self-Employed,” monthly support of KRW 700,000 for two months in cash, to help get over the period of COVID-19 hardship.

    Our economy is in a state of emergency. For the last few days, I went to meet self-employed proprietors in person around Seoul. I listened to their heartbreaking stories. They were suffering from plummeted sales by over 30 percent on average. At the present rate of progress, it is obvious that we will see the collapse of local businesses, which will lead to the severance of the virtuous cycle of the public economy followed by the failure of the household economy.

    They are pleading that with the existing supporting measures, it is not easy to cross the stream of hardship. So far, both the central government and the Seoul Metropolitan Government have only provided loans or financing for those who are self-employed. In fact, loans should be paid back in the end and it adds to the household debt to cause another pain and detonator.

    What is required for those who are self-employed running small businesses without the ability to repay is not the loans but working funds that are usable at the moment. An emergency transfusion is needed for them to keep their businesses. This measure is to be preemptively carried out by Seoul before the central government can attend to the issue.

    Seoul put heads together with experts in private domains, members of the city council, officials from autonomous districts, and actual self-employed proprietors. We discussed over and over to figure out how we could go through the emergency wisely, how we could hold and guide the hands of the citizens who are crossing the deep river of hardship. Finally, we have decided to take a step forward from the existing financing support or rental cutting policy for the self-employed who are experiencing a sharp drop in sales and in danger of shutting down their businesses.

    Seoul has determined to escape from the existing scheme of support and provide direct, continual, and concentrated support so that the self-employed can feel the actual effect via the Seoul Stimulus Checks for the Self-Employed. To make it possible, Seoul will invest approximately KRW 600 billion.

    Self-employed proprietors who have been running their business in Seoul for more than six months with an annual revenue of less than KRW 200 million can receive KRW 700,000 a month, a total of KRW 1,400,000 over two months. Excluding some businesses for which the financing is restricted, 72% of eligible businesses, approximately 410,000 proprietors, can benefit from the city’s support.

    Although we are eager to be capable of supporting every local business owner, the resources we have prepared by exploring every avenue are limited and we decided the wide and thin support will not be a practical aid. Thus, we resolved to provide the self-employed, who are not easy to benefit from financing and have little ability to repay, with strong concentrated support for consecutive two months.

    The support will be able to help them withstand their current circumstances until June, the end of the second quarter. The application process will be simplified as much as possible so that the stimulus checks can be swiftly provided. Although the aftermath of COVID-19 will linger, we need the strength to endure. The Seoul Stimulus Checks for the Self-Employed will be an unprecedented support for an unprecedented social disaster.

    To be sure, the Seoul Metropolitan Government cannot help but bear an extreme financial burden. We employed every possible means to secure the funds by abandoning/reducing city projects.

    As I have always emphasized, citizens come first before the city itself. If the citizens are on their last legs, what is of use the government of Seoul? We only hope that the fourth resolution of Seoul can serve as the bridge over the river of hardship for the self-employed who are in the crisis of closing their business for the sharply declining sales due to the COVID-19.

    For the execution of the Seoul Stimulus Checks for the Self-Employed, we desperately need help from the city council. We should revise the ordinance of Seoul as soon as possible to prepare the clear grounds to support the small business owners who are struck by COVID-19 to keep their businesses. I take this opportunity to deliver my gratitude in advance as I believe that the city council will work together with us to move in the same direction.

    Seoul believes that Stimulus Checks for the Self-Employed is essential, yet not sufficient—stimulus checks for the self-employed should be introduced on the national level by the central government for all Korean citizens to survive the current battle, recover back to ordinary life and take new steps forward. Even though this is an untrodden path, I earnestly request the South Korean government and the National Assembly have a radical and exceptional discussion over the countermeasure.

    We are winning the battle against COVID-19 through communication and solidarity, trust and contribution, collaboration and union, and passion and innovation. We should join forces to bring the “vitality of the spring” back for all of us. Seoul will always be on the frontline. The vaccine for the city of Seoul is its unwavering citizens. Thank you.