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South Korea to allocate $13 billion additional budget for small businesses

Photo by: Cait Ellis/Unsplash

South Korea is one of the countries with the worst case of job loss and business closures due to the COVID-19 pandemic. Because of this, the government is releasing additional budgets to help small businesses and to protect jobs.

The budget was drafted amid the COVID-19 resurgence

Reuters reported that the government of South Korea is drafting a proposal for an extra budget amounting to KRW15 trillion or around $13.38 billion to intensify support for small business owners and avoid more job losses in the future. The plan was revealed on Tuesday, March 2.

The government is giving out this aid as the incidence of coronavirus keeps resurging. Oftentimes, just as the country announces a low number of infections, the cases would rise again, which is making it difficult for small shop owners to go back to their businesses. This leads to permanent shop closures, and in turn, many people lose their jobs.

Furthermore, when the resurgence of COVID-19 happens, social distancing and lockdowns are heightened to curb the spread of the virus. While this is done to protect everyone, the businesses suffer since people can’t go out of their homes and are prohibited from gathering.

In an effort to at least minimize the loss for businesses, the finance ministry in South Korea stated that the government would increase the budget to a historic KRW573 trillion for this year.

"We want to make sure there are no blind spots left when it comes to using support funds for small businesses, compared to how we spent them before," S. Korea’s deputy finance minister Ahn Do Geol said via a press conference.

Business owners’ lawsuits

This is good news to business owners since they were the most affected at this time of the pandemic. They are so frustrated already because they have no income, but their bills keep piling up.

Due to the business losses, they even sued the government for their predicament and situation. They blame the state’s social distancing and other COVID-19 related rules for the decline of their businesses and losing the chance to recover.

Previously, cafe owners, gym owners, and more filed a lawsuit. As per Korea Joongang Daily, they complained about the administration’s five-tier social distancing policy because this restriction level is making them go out of business. Each of them is seeking KRW5 million as compensation.

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