Every cloud has a silver lining
The author is an economic news editor of the JoongAng Ilbo.
Suddenly, we have become super-sensitive. Coughing in public transportation sounds 10-times louder. Before getting on the subway or bus, we scan to make sure everyone onboard is wearing a face mask. We avoid coming in contact with unmasked people. A face mask helps to protect us from infection and at the same has become a symbol of concern for others in the community.
The new coronavirus (Covid-19) landed hard on the economy. The financial markets were rocked, with the key index falling 4 percent on Monday as the infection tally broke 800. The economy must flow. Covid-19 has caused a disruption in the flow. We pray this would end soon. If the situation continues, Korea will lose connection with the outside world. Exports will take a direct hit. Since people keep indoors, streets and stores are empty.
Yet I tried to find a silver lining from the gloom. It could help ease the panic in the financial market.
First, there is no disagreement in the argument for drawing up a supplementary budget. It has become an annual ritual. The habitual practice by the Moon Jae-in administration has been repeatedly criticized. Talking about a supplementary budget only in the second month of the year with a supersized 512.3 trillion won ($430 billion) spending plan raises a deep concern about the government’s easy resort to fiscal stimuli. Yet the rivaling parties as well as the public all back the plan this time. The emergency funding is on track without any political wrangling. For effectiveness, the extraordinary budget should be implemented speedily and sufficiently.
Second, I agree with the theory by Seoul National University Professor Kim Byung-yeon that a disaster can be an opportunity to build social trust. He argued that if the trust level in Korea is raised to the standard in the United States, Korea’s GDP could expand at a pace of 2.7 percent, not the 2.0 percent of 2019. That much growth would be equivalent to 50 trillion won worth of fiscal spending. Since Korea critically lacks social capital, we can use the challenge from the epidemic to build trust. Faith in one another about taking care of ourselves will be as helpful as a supplementary budget.
Third, the coronavirus outbreak underscored how much Korean companies rely on the global supply chain. Manufacturing came to a halt because production from Chinese suppliers was disrupted by the epidemic. Korean products became price competitive around the world by securing cheap quality products in other markets. Now, the time has come for Korean producers to find a balance in terms of cost and risk in their supply sourcing.
Last but not least, telemedicine, which is yet to be legalized in Korea, has been temporarily allowed to prevent infection through hospital visits. Since there is no app offering telemedicine, getting prescriptions online and payment procedures are still confusing. But it is a meaningful step as the public will be able to experience remote medical services that have not made progress beyond trial services due to strong opposition from doctors for 20 years.
The government must consider legalizing telemedicine — an area Korea has an edge in terms of connectivity and medical infrastructure — to avoid good skills leaving the country in the face of suffocating regulatory hurdles.
It is uncertain when this nightmare will be over. We may have to endure for a longer period. But we must have faith in one another. Every cloud has a silver lining.
JoongAng Ilbo, Feb. 25, Page 27