‘Korean-style basic income system needed’
Jeju governor, Nobel laureate discuss inequality issues in Korea
Jeju Governor Won Hee-ryong said the old should cooperate with the young in tackling the issues of deepening inequality among the younger generations, in order to build an equal and inclusive society.
His remarks came during an online disc ussion session held Monday with Nobel Prize-winning economist Abhijit Vinayak Banerjee on inequality issues in Korea and the importance of public education and social welfare systems in addressing such problems.
The session came ahead of the 16th Jeju Forum for Peace and Prosperity, scheduled to be held from June 24 to 26 on the southern island of Jeju by the Jeju Peace Institute.
The discussion kicked off with Banerjee’s lecture on his book “Good Economics for Hard Times,” co-written with Esther Duflo.
He viewed that Korea, like many other countries, has encountered increasing inequality, with the COVID-19 pandemic crisis exacerbating the gap between rich and poor. He pointed out trade and automation, which have displaced many low-skilled workers, as the two main factors of deepening inequality.
Banerjee explained “the absence of effective mechanisms for compensating them” as a bigger problem. “We have promised people that the growth will be shared, but it hasn’t been shared. There are people who lose from the change of economies and from trade, but we don’t compensate them,” he said. He believed that this has led many people to lose trust in government policies, and thus governments should reformulate their policies in a way that makes the poor feel that they are at the center of the redistribution process.
Won agreed with the idea, saying, “Stagnant economic growth and worsening inequality have led to declining public trust in the government. In order to regain trust, policymakers should come up with credible policies based on reasoning and evidence.”
The two also shared their thoughts on basic income support, an idea of ensuring every citizen receives at least some income, which has gained momentum amid
the COVID-19 pandemic.
“Korea seems to have a very elaborate employment insurance system. But such systems are not permanent,” Banerjee said.
Therefore, the economist stressed the importance of provision of basic support, especially in order to help those in desperate need. But he added that important questions such as to whom the support should be targeted must be discussed further.
Won said, “Considering the country’s developed social welfare system and limited resources, we should come up with our own
basic income system, rather than adopting a universal basic income scheme under which a small amount of funds are provided to all citizens regardless of their socioeconomic status.”
Policies for younger generation
Regarding the inequality issues the younger generations are facing in terms of education, employment and housing, Won said, “The older generation, policymakers and the young should work together to make an inclusive society in which
all people are guaranteed with opportunities for education and career development.” The video of their discussion will be screened on the first day of the forum, according to the organizer.
The annual international peace forum is a regional multilateral dialogue for promoting peace and prosperity in Asia, hosted by Jeju Special Self-Governing Province, the International Peace Foundation and East Asia Foundation, with the support of the Ministry of Foreign Affairs and Jeju Free International City Development Center.
This year, under the main theme of “Sustainable Peace and Inclusive Prosperity,” the forum will focus on sustainable peace for future generations and inclusive post-pandemic prosperity.
The three-day event will bring together prominent figures such as former French President Francois Hollande, former United Nations Secretary General Ban Ki-moon, former Australian Prime Minister Kevin Rudd and former Thailand Prime Minister Abhisit Vejjajiva. The key sessions will be streamed live on the forum’s official YouTube channel.