"Sustainable Financial Matters": A Reality Check for Korea's Incoming Government
In South Korea, the leading presidential candidates, Lee Jae-myung from the Democratic Party and Kim Moon-soo of the People Power Party, are advocating for distinctive economic strategies amidst escalating national debt and fiscal deficits. While both candidates advocate for supporting small businesses, their broader approaches and commitments differ markedly.
Lee Jae-myung has vowed to swiftly establish a presidential-led emergency task force to tackle the ongoing economic crisis, prioritizing economic revitalization and improving the public's livelihoods. He has also called for a supplementary budget to provide a short-term economic boost and address pressing issues, aiming to inject stimulus into the economy. In addition, he proposes financial relief for small businesses affected by the COVID-19 pandemic through the creation of a "bad bank" to retire long-term delinquent bonds. He also emphasizes strengthening financial consumer protection and broadening tax deductions on earned income.
On the other hand, Kim Moon-soo emphasizes rural and regional economic development, aiming to expand economic opportunities beyond Seoul through measures like devolving farmland and greenbelt management decision-making to local governments and accelerating the expansion of the GTX high-speed rail system. He also pledges to significantly boost local fiscal resources, aiming to double them from their 2025 level of 14.7 trillion won. To support small businesses, he proposes expanding the role of the New Start Fund and establishing an Internet bank specifically for small businesses. Additionally, he focuses on encouraging capital markets and overseas investment. Like Lee, he also proposes expanded tax deductions for earned income.
Both candidates' platforms involve costly commitments, such as increased local funding, large-scale support for small businesses, and significant tax deductions. However, there is minimal discussion in their pledges about addressing or reducing the national debt and fiscal deficit, with both candidates' strategies leaning towards increased fiscal spending and tax cuts, which may exacerbate current fiscal challenges unless balanced with new revenue streams or structural reforms.
Their focus on economic stimulus and direct support for small businesses is aimed at resolving immediate crises and fostering growth. However, the long-term sustainability of these strategies is questionable if not supplemented by broader reforms or spending discipline.
- The government in South Korea's presidential race, with candidates Lee Jae-myung and Kim Moon-soo, are proposing distinct economic strategies, focusing on supporting small businesses.
- Lee Jae-myung plans to create a presidential task force to combat economic issues, focusing on stimulus, financial relief, and consumer protection, while Kim Moon-soo emphasizes rural development, local fiscal resources, and expanding the role of fund and Internet banks for small businesses.
- Editorial columns on their respective platforms show that both candidates have costly commitments, including increased local funding, extensive support for small businesses, and tax deductions, yet fail to address the escalating national debt and fiscal deficits.
- As the candidates prioritize economic stimulus and small business support, general-news outlets question the long-term sustainability of these strategies without broader reforms or spending discipline to ensure fiscal stability.
- The finance and business sectors closely watch the election outcome, as the candidates' platforms, leaning towards increased fiscal spending and tax cuts, may impact the national economy and financial markets if not balanced with new revenue streams or structural reforms.
