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Fiscal chief seeks to boost spending amid COVID-19 fallout

Minister urges people ‘eat out more’ to help struggling restaurants

Feb. 19, 2020 - 17:03 By Bae Hyun-jung

Deputy Prime Minister and Finance Minister Hong Nam-ki speaks Wednesday in a meeting of economy-related ministers at the Export-Import Bank of Korea. (Yonhap)

Responding to public anxiety over prolonged fallout of the novel coronavirus, the government distinctly turned to all-out countermeasures, marking a turn from its early optimism.

But its policy direction that people should resume consumption has raised controversy, as the country continued to see additional cases of infection this week.

“(The government) is mobilizing all available policy actions under the grave awareness that (the given circumstances) correspond to an economic emergency,” said Deputy Prime Minister and Finance Minister Hong Nam-ki, while chairing a meeting of economy-related ministers at the Export-Import Bank of Korea in Yeouido.

“As primary steps, (the government) will unveil a comprehensive set of plans by the end of this month to boost investment and consumption.”

The chief fiscal policymaker’s remarks came in line with President Moon Jae-in, who urged the nation to maximize its guard against the widely spreading disease.

“Extraordinary situations need extraordinary measures. Preemptive response and special measures for both the people’s safety and the economy should be drawn up,” Moon said at a Cabinet meeting the previous day.

Embracing the state chief’s message, the government vowed to insert an additional 100 billion won ($84 million) for local governments to enhance quarantine procedures, according to the Ministry of Economy and Finance.

“We shall make maximum use of reserve funds allocated to provincial governments for disaster control,” Hong said.

“Some 36.7 billion won has already been executed, while another 100 billion won will be added.”

The bidding process for mass purchases of key items -- such as diagnostic agents and facial masks -- has also been shortened for efficiency’s sake, the minister added.

Earlier in the week, authorities announced a road map to help the transportation and lodging industries, which took a direct hit from the decreased volume of travelers and mass booking cancellations. An urgent liquidity of 300 billion won is set to be injected to low-cost carriers.

While vowing maximum fiscal spending on the government’s side, Hong also raised his voice to urge people to spend more and revitalize the stalled market.

“In extraordinary situations like now, the most effective economic action is to boost consumption and corporate investment,” Hong said.

He called for companies and workers to actively hold get-together dinners, underlining that such occasions would not contradict the country’s 52-hour weekly working-hour ceiling.

To add synergy to the eating-out campaign, the government decided to reduce the weekly operating days of cafeterias at government complexes.

The minister’s suggestion, however, came under fire in light of the prolonged epidemic.

Even President Moon and first lady Kim Jung-sook faced controversy following their visits to local traditional markets.

Kim turned out to have been present at a store previously visited by a confirmed patient of COVID-19. The corresponding store had been temporarily shut down for a safety checkup.

On Wednesday, Korea confirmed 15 more cases of COVID-19, bringing the total number of infections to 46.

By Bae Hyun-jung (