Will local businesses of Gyeonggi-do revive with Chuseok ahead? The provincial government announces its distribution of “limited local currency” with an exceptional 25% incentive.
Createdd 2020-09-09 Hit 12
○ Governor Lee Jae-myung and Jang Hyun-gook, Chairman of the Gyeonggido Assembly, announced a plan to distribute limited local currency to revitalize the economy during the Chuseok holiday on the 9th.
○ Starting Sept. 18 (scheduled), the province will provide an additional 15% incentive on top of a 10% basic incentive for Gyeonggi local currency of up to KRW 200,000.
– KRW 20,000 to be provided immediately upon charging KRW 200,000 after the 18th. Additional KRW 30,000 to be provided if all KRW 200,000 is spent by Nov. 17.
○ Targets all provincial residents with a Gyeonggi local currency card or mobile currency. To be provided only until the budget of KRW 100 billion runs dry.
– About 3.33 million people will benefit from the KRW 30,000 worth of provincial and Gyeonggi local currency per person. Retails sales expected to increase by about KRW 830 billion.
○ The provincial government accepts the Gyeonggido Assembly’s proposal to launch an economic revitalization project using incentives for local currency.
The Gyeonggi Provincial Governemtn and the Gyeonggido Assembly will provide a limited local currency (consumption support fund) that offers a 25% incentive, the highest ever, to spend KRW 250,000 when charging KRW 200,000 to revitalize the economy during the Chuseok holiday. It is the Gyeonggi Provincial Government’s second economic policy to combat the epidemic following the Gyeonggi Disaster Basic Income funding that took effect in April.
Gyeonggi-do Governor Lee Jae-myung, Gyeonggido Assembly Chairman Jang Hyun-gook, and Democratic Party representative in the Gyeonggido Assembly Park Geun-cheol held an emergency joint press conference at the Gyeonggi Provincial Office on the morning of the 9th and announced their plan to provide a limited local currency to revitalize the economy during the Chuseok holiday.
Gyeonggi-do Governor Lee Jae-myung said, “Small business owners and small-scale sole proprietors, which serve as the capillaries of the people’s livelihood, have been directly hit. At this rate, we will be unable to swerve from extreme polarization of income, consumption demand falling off the cliff, and a vicious cycle of economic recession. Under such a consciousness of crisis, Gyeonggi-do has come up with measures to promote consumption using local currency incentives together with the Gyeonggido Assembly to revitalize the economy for small businesses that are faced with an extreme crisis, before the Chuseok holiday.”
As a result, Gyeonggi-do will provide an additional limited KRW 30,000 (15%) on top of the basic incentive of 10% for the charged local currency of up to KRW 200,000 in Gyeonggi-do, starting September 18th (scheduled). In other words, in addition to offering KRW 20,000 (10%) as an incentive in advance when charging KRW 200,000, the government will provide KRW 30,000 (15%) if the amount is spent in two months to provide a total of 25% or KRW 50,000. If less than KRW 200,000 is spent, there will be no 15% consumption support fund provided, and up to KRW 30,000 will be provided for any consumption of KRW 200,000 or more.
The limited local currency will be provided on a “first-come, first-served” basis to all provincial residents with Gyeonggi local currency cards or mobile currencies until the budget runs out. To receive the consumption support fund in the limited local currency, residents must spend at least KRW 200,000 by November 17 at the latest, based on the amount spent after September 18.
The basic pre-incentive (10%) is provided immediately after charging as before, but the limited consumption support fund for increased consumption will be paid on October 26 or November 26 after consumption of more than KRW 200,000 is confirmed. The post-consumption support fund (15% or KRW 30,000) will expire one month after the date of receipt, and thus, it must be spent within the given period.
The budget that Gyeonggi-do will spend on providing the limited local currency will total KRW 100 billion, and if it is executed as planned, about 3.33 million users of local currency in Gyeonggi-do will benefit. The province expects that retail sales of small and medium-sized businesses will increase by up to KRW 830 billion, and the resultant production inducement will have a cardiopulmonary resuscitation effect on the local economy at standstill, to a small degree.
The limited provision of local currency began when the Gyeonggido Assembly proposed a project to revitalize the local economy for small business owners in time of need due to COVID-19. The provincial government has come up with the limited provision project of local currency to revitalize the economy during the Chuseok holiday by accepting the opinions of the provincial assembly and plans to consult with the assembly to raise KRW 100 billion worth of funds required.
Jang Hyun-gook, Chairman of the Gyeonggido Assembly, said, “The COVID-19 has resulted in the recession in the local economy, making it difficult for small business owners and small-scale sole proprietors to make ends meet. “We have decided to provide a limited local currency through discussions with the provincial government to combat this crisis,” he said. “KRW 30,000 may be small for each individual, but with the power of the provincial residents combined, it will generate an effect of promoting about KRW 1 trillion in consumption. We look forward to your active involvement in reviving the economy by applying for the limited local currency,” he added.
Park Geun-cheol, a representative of the Democratic Party in the Gyeonggido Assembly, said, “According to a survey for ordinary small business owners nationwide conducted by the Korea Federations of Micro Enterprises, the situation is so dire as 60% of the respondents answered their sales have fallen by 90% since the resurgence of COVID-19.” “We believe that the provision of the consumption support fund will play a pivotal role in bringing blood back to the cut-off capillaries in the economy,” he added.
Governor Lee said, “There may be criticism that consumption-boosting policies will hinder the epidemic control, but the economic epidemic control is just as important as the epidemic control itself. “Even during a war, consumption must be made to maintain a minimum lifestyle, and merchants must sell goods to make ends meet,” he added. “Since it is for the economic measure against epidemics in addition to the control of the epidemics, please strictly follow the preventive measures against epidemics in your consumption activities to demonstrate that both economic measures and preventive measures against epidemics are compatible with each other.”