Yoon’s economic team starts path to recovery
The new administration’s economic policy team will embark on a path to economic recovery from Wednesday, with its first job being a proposal for an extra budget worth around 35 trillion won ($27.4 billion) to support pandemic-stricken small business owners.
According to the government sources, President Yoon Suk-yeol will officially approve Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho for the job, Wednesday, after Choo received parliamentary approval last week.
Concerning two vice financial minister seats, former Asian Development Bank Director Bang Ki-seon was named as the first vice financial minister, Monday.
On the same day, Choi Sang-dae, who has been serving as a deputy minister at the ministry, was named as the second vice finance minister.
The two will assist Choo in carrying out Yoon’s promises on macroeconomic and financial issues that drew public attention amid growing concerns over slowing growth and rising prices.
The bleak economic outlook aggravates the woes of small business owners, as they have not fully recovered from the pandemic outbreak, while the costs of running businesses have been going up sharply. They accordingly have keen interest in how much support they can receive from the new administration as promised by Yoon throughout his election campaign.
The financial ministry appears to have set the supplementary budget at around 35 trillion, down from the 50 trillion won Yoon initially sought, after deducting the amount of the separate budget allotted by the administration of Yoon’s predecessor, Moon Jae-in, early this year.
The exact size of the relief fund will be decided during a Cabinet meeting, Thursday.
The government will likely dole out most of the funds in cash.
Each beneficiary will be eligible to receive funds equivalent to the difference between the financial damage they suffered during the 20202021 period of the pandemic and the amount they received from the previous administration in disaster relief over the same period.
For instance, a business owner could receive 5 million won from the government if their total financial damage amounts to 30 million won and 25 million won was already provided by the Moon administration.
How the supplementary budget will be financed will be critical, considering the fact that the national debt snowballed during Moon’s fiveyear presidency and issuing treasury bonds would worsen fiscal soundness.
It is believed that the financial ministry under Choo will focus on restructuring the 2022 budget, including the discretionary budget, which refers to costs for non-mandatory spending purposes.
The ministry will also seek other ways to lessen the burden on small business owners with low credit scores who are struggling to repay loans.
Many of them borrowed money from second-tier banks that have lenient lending rules compared to first-tier banks, at the cost of higher interest rates.
A possible rescue plan is to have state-run Korea Asset Management Corporation to underwrite the debt.