South Korea Feels Economic Impact of ‘Social Distancing’
SEOUL, SOUTH KOREA - As the coronavirus rattles global markets, some analysts are now warning of a possible global recession. The damage is already starting to show in some countries hit hardest by the outbreak.
Lee Jae-hoon is standing in the Korean barbecue restaurant he owns in this normally busy office district of Seoul. There are almost no customers.
He says at this time on Thursdays, the restaurant is always filled with customers. But as you can see, there is no one.
This is what many restaurants in South Korea look like now, amid a voluntary “social distancing” campaign meant to contain the coronavirus.
Lee says it’s the first time in his 59 years of life he’s ever seen sales drop this sharply - for any reason.
At this Seoul flower shop, sales are also taking a big hit.
Owner Kim Choon-hwan says no one is buying flowers. She says she needs a loan, but she doesn’t know if she’ll get one.
Economist Woo Seok-jin says not only are small businesses taking a hit. So are large ones. He says the virus is delivering a double economic gut punch.
He says disease outbreaks usually just affect demand -- that is, people buy fewer things. But in the case of the coronavirus, it is also disrupting the production side, too.
Some factories in South Korea have temporarily closed, either because of infections or a shortage of parts from China, where the outbreak began.
In response to the virus, South Korea has announced a nearly $10 billion economic stimulus package. Among other measures, it will allow business owners to get cheaper loans.
The help can not come soon enough for Seoul travel agency owner Lee Jeong-hwan.
No customers are calling, he says, let alone booking trips. He says he’s waiting on a government emergency loan.
As the virus spreads, it’s a situation that many countries may soon find themselves in.
Source: Voice of America