Doubling rescue package

Time to minimize economic fallout from pandemic

President Moon Jae-in's decision to double an economic rescue package to 100 trillion won ($80 billion) reflects his determination to minimize the economic damage arising from the coronavirus pandemic. This massive package also reflects a sense of crisis that the Korean economy may collapse due to a potential credit crunch amid the public health disaster.

Announcing the decision during the second session of the Emergency Economic Council, Tuesday, Moon promised that the government will serve as a “stout breakwater” to protect the economy and businesses from the impact of COVID-19. “We will make sure that normal companies will never go out of business because of a temporary liquidity shortage,” he said.

The twofold increase came after the Moon administration agreed last week to mobilize 50 trillion won to help small- and medium-sized enterprises (SMEs) and the self-employed which have suffered the most from the negative effects of the novel coronavirus. The expanded package will provide financial support and low interest loans not only to SMEs but also big businesses to ride out any economic difficulties.

This means the government will do more to prevent the impact of the epidemic from spilling over to the nation's key manufacturing industries, including automobiles and chip-making. The coronavirus crisis has so far battered the airline, tourism, hospitality, entertainment and retail sectors since South Korea reported its first confirmed case Jan. 20. Now, the economic damage is spreading to the country's major industries due to the disruption of global supply chains.

In this regard, the doubling of the aid package is more than welcome, although it is somewhat belated considering the rapid spread of the virus worldwide and the magnitude of its catastrophic consequences. Now what's important is to execute the package in a speedy and appropriate manner. The government and the ruling party should make every effort to seek bipartisanship with the opposition parties to ensure that hard-hit businesses can get the pledged support without any delay.

The rival parties should refrain from political squabbling over the rescue package in the run-up to the April 15 general election. It is of no use for the opposition camp, especially the conservative United Future Party, to denounce the expanding rescue program as a bid by the liberal government to woo voters. We urge the opposition parties to join the pan-national efforts to save the economy from plunging into a bottomless pit.

The Moon government faces a daunting task of bringing COVID-19 under control and keeping Korea Inc. afloat. It is also equally important to stabilize the financial markets. The package includes 20 trillion won to stabilize the bond market and 10.7 trillion won to stabilize the securities market. This stabilization measure will hopefully help regain investor confidence and prevent the outflow of foreign capital.

Most of all, the authorities should pull out all the stops to protect people's health from the pandemic and stabilize their livelihoods. The 100-trillion-won package may be insufficient. Thus, the government should not hesitate to mobilize all possible means to mitigate the health crisis and looming economic calamity in a pre-emptive manner.