Questions/Answers

○ Policy Introduction - This project implemented the policy of compensating sales loss for small business owners and promoting local consumption to keep the local economy from stagnating amid the COVID-19 pandemic, mitigating the exposure and vulnerability to disaster. ○ Issues to Address - According to the ‘consumption trend report’ from the early days of the pandemic, small business owners had seriously declining sales revenues due to no gathering and restricted business and it was apparent that they would not survive the burden of fixed costs within 4~6 months unless emergency supports were provided. Temporary and permanent shutdown of small business owners leads to the unemployment of business operators as well as employees and delivery workers, which placed the policy priority on the urgency of helping small business owners overcome the crisis and regain the resiliency. ○ Tasks - Hwaseong formed the Hwaseong Disaster Safety Response Headquarter and changed the organizational system to respond to the COVID-19, focusing on addressing the social and economic issues in the community. - Various supports, including cash and local currency support and tax reduction, were provided without discrimination for small business owners, low income communities, vulnerable communities, and foreigners. ○ Target - Disburse the emergency fund to 15,412 small business owners who had to take up the revenue loss of 10% or more to help them overcome the economic crisis - Support small businesses affected by disclosing the movement paths of the confirmed cases and relieve additional damages from the COVID response policy - Build a circulating economic system, which focuses on local small business owners, by carrying out the promotion events for local currency (currency that can be used only in the small businesses in the jurisdiction of Hwaseong) - Introduce a public delivery app to push the delivery fee reduction for small business owners

While small business owners were hit hardest by COVID-19, the local municipalities were lacking in legal grounds to support them. Hwaseong enacted the Hwaseong Disaster Basic Income Disbursement Ordinance, the first in its kind in Korea, to put a system in place to provide financial supports. The city actively interpreted the Infectious Disease Prevention and Control Act for small business owners, who were affected additionally by the early quarantine measure, i.e. movement path disclosure of the confirmed cases, taken by the government and proceeded to secure the budget and support them with the approval from the city council.

○ Hwaseong’s response policy to the COVID-19 pandemic contributes to the SDGs Goal 1 “End poverty in all its forms everywhere” and relates to the UN SDGs Target 1-5. - The global spreading of the COVID-19 withered the life of all communities, throwing them into great shocks. Small business owners had dwindling income, which led to reduced income for the job-vulnerable people, such as workers, delivery persons, and proxy drivers. The government provided supports repeatedly to minimize impacts and recover a normalcy. Still, the local municipalities’ efforts were quintessential for the government policies to take effects. - Hwaseong first supported small business owners under crisis in Korea to ensure that the job-vulnerable people do not slip into poverty, which was verified by the findings from the Gyeonggi Research Institute’s study. Under the COVID-19 pandemic, the local currency and direct support measures for self-employed small business owners helped the small business sales in Hwaseong surge by the average of 17% versus the same period of the previous year, whereas that in Seoul was down by 20% on the average during the same period.

○ Small business owners form the foundation of a national economy. Hwaseong sought to reorganize the long-term structure, while responding to the crisis, as the contracted consumption could lead to damaging the society, economy, and environment. - With the local economy foundation subject to collapse due to COVID-19, the policy enticed the local currency to be used by driving up the local currency, honoring stores, and used amounts, paving the way for a locally circular economy. - Supports were provided to help the job-vulnerable and poor people, who were most severely affected, escape from poverty, mitigating the social bipolarization.

- Hwaseong raised the awareness for the connectivity between the SDGs’ underlying spirit of ‘leave no one behind’ and the municipal policies. - With the principle of ‘action leads to answers,’ Hwaseong had meetings with the merchant associations of traditional markets and shopping centers amid the COVID and ensured that substantial helps were available from the emergent policy implementation. This prompted the merchant associations, coalition of small business owners, to help execute the policies effectively and swiftly by ensuring no areas to be left behind and publicizing. They also organized an autonomous disaster prevention team to focus on quarantine activities. - While discussing the measures to support the community members under crisis, Hwaseong found out inconsistencies in the laws to protect and support the small business owners, which required the central government to amend the laws. Hwaseong submitted a recommendation to the Korean government and the National Assembly, which served the momentum for the central government to revise the announcement for the Emergency Welfare Support Act and examine the supports for workers in special employment. - Further, Washington used conventional media as well as many other SNS for transparent communication to establish credibility for the municipality under the crisis.

- Marriage immigrants and permanent residents had their rights to holding up their ends and living a stable life as an equal member of the Korean society. However, they had been treated improperly and left behind amid the national disaster. Under the principle of ‘leave no one behind,’ Hwaseong partially amended the Hwaseong Disaster Basic Income Disbursement Ordinance to support the disaster basic income for the foreigners left behind, having 5,292 foreign residents receive the support. Hwaseong’s support of the disaster basic income for foreigners served the momentum to validate the statutory equality in the Local Autonomy Act.

- The COVID-19 response policies were implemented in two directions: (1) Ensure that the economy circulates by supporting every single one of the community members to help them avoid financial struggles from the COVID-19 disaster, and (2) provide tailored supports to help the people affected directly otherwise overcome the crisis. - Hwaseong has 53,163 self-employed small businesses with estimated 133,269 business owners and employees working for self-employed small businesses (no official statistical data available). Among them, 62%, or 33,000 businesses, had been affected by the COVID-19 with their sales declining by 27% at minimum up to 75%. - Hwaseong chose them for the first policy beneficiary group. Hwaseong used the local currency to allow a local circular economy, which helped make the small business employees and related community members least affected by the COVID-19, and provided the emergency livelihood support over five times to the self-employed business owners whose sales declined by 10% or more. As a result, the disaster relief disbursement led to the effect of 17.5% increase of sales for the self-employed small business owners in Hwaseong, whereas their sales declined by 7.8%.

5-1 주요 발전단계, 모니터링 및 평가, 추진일정 등을 포함한 정책 시행방법을 설명하시오.(900자) - The prolonged COVID-19 engaged key policies into monitoring situation for any changes and planning the measures accordingly. Jan. 28, 2020: Formed the Hwaseong Disaster Safety Headquarter Mar. 8, 2020 : Decided ’cash direct support direction’ for the community members under crisis and small business owners Mar. 17, 2020: First supplementary revised budget planned (COVID-19 special budget including emergency welfare livelihood expense, local currency promotion event, and discount rate budget for local currency) Mar. 30, 2020: Developed the online application system to support the emergency welfare livelihood expense swiftly Mar. 30, 2020: Started to disburse the emergency disaster livelihood allowance for the community members under crisis Apr. 9, 2020: Disbursed the Hwaseong disaster basic income Mar. 23, 2020 : Supported the Hwaseong emergency livelihood expense for small business owners (1st~4th) Apr. 24, 2020 : Introduced the amended ordinance for the disaster basic income (statutory disbursement for marriage immigrants and permanent residents) Apr. 12, 2020 : Supported the Hwaseong emergency living stabilization relief for small business owners - A survey was conducted to study the satisfaction and uses for the Hwaseong emergency living stabilization relief for small business owners, who had to undergo no gathering and restricted operation from Apr. 12, 2021, Mon, through May 31, 2021. The study findings revealed that 84.8% of the respondents were satisfied or very satisfied and most respondents indicated their satisfaction with easy online application (95.9%) and fast disbursement. - Self-employed business owners used the most of the relief fund to pay for fixed expenses,, as 80% of them are on a commercial lease with great burdens from fixed expenses, including store rents. It was found, as a result, that the support of the emergency living stabilization fund effectively helped the small business owners maintain their workplaces in jurisdiction.

As supporting the COVID-19 emergency livelihood expense required KRW 70 billion, it had to be agreed with the city council to plan for and disburse the supplementary revised budget. The close discussion with the city council helped enact the ordinance, appropriate the emergency budget, and execute. - Small business owners with less than one year into business were lacking in the grounds for proving their sales, which required a measure to be put into place to support the emergency livelihood expense for them. meetings with the stakeholders helped provide closely woven supports to ensure no one is left behind.

- The local currency is a policy to protect small business owners which boosted the income for local merchants, as it was available for use in department stores, hypermarkets, corporate supermarket (SSM), franchise store, and entertainment and gaming businesses. - Hwaseong expedited the local currency issuance under the COVID-19 with the issued amounts up by 668% versus 2019 and 97% of the accumulated local currency amounts spent in the local small business stores. Local fund circulation helps traditional markets and back alley stores recoup their business and local-considering community consumption drives local developments, for which Hwaseong took a lead.

- The local currency policy was recognized as a success case by other municipalities in Gyeonggi-do and has spread to 31 cities and guns in Gyeonggi-do since 2019. “Consumers” enjoyed additional incentive of up to 6~10% with 30% of the used amount available for income tax reduction. “Honoring stores” was able to actually increase their sales from the upsurge in local currency users and the increased consumption, while the service fees are 0.3%P less than credit cards with no separate membership fee charged. - Hwaseong fully leveraged the local currency policy enforced by Gyeonggi-do, having it expanded and established.

- Applying for the COVID-19 Emergency Livelihood Fund was time consuming, when applied offline, of which an online system was developed to address the issue. Small business owners was able to verify the application, receipt, and selection themselves via both online and offline, allowing the swift policy execution and reducing manpower needed. - The Hwaseong Data Analysis Team analyzed the users for their gender, ages, area of use, business type of use, and monthly used amount, which was used to find out where those consumption come from and who are the main consumers.

- Relating to the COVID-19 Emergency Livelihood Expense support, Hwaseong appealed for the inconsistencies and limitations of the small business owner protection and support laws and submitted to the National Assembly and the government the Letter of Complaint for Nationwide Small Business Livelihood Support to Overcome the COVID-19 Economy Emergency, which led to amending the announcement of the Emergency Welfare Support Act (Apr. 6, 2020). This helped deem the self-employed business owners as under crisis and provide supports for them, putting the statutory and institutional grounds in place to directly support small business owners. - The Hwaseong Policy of Emergency Welfare and Livelihood Expense Support for COVID-19 Affected Small Business Owners laid the foundation for providing supports for small business owners nationwide, as the policy was benchmarked and pushed by other local municipalities, including Seoul Jung-gu, Gyeonggi-do Pyeongtaek-si and Siheung-si, Jeonnam Hwasun-gun, and Gyeongnam Geoje-si. - 31 cities and guns in Gyeonggi-do are issuing local currencies with their issued amounts on the rise every year and the national expansion underway. The Act on Invigoration of Local Love Gift Card Use was proclaimed on May 1, 2020 to stipulate the statutory regulation on the grounds of issuing local currencies.

- The application was completed with no issues found for policy advancement

- The budget is shared by the central government, Gyeonggi-do, and Hwaseong with KRW 51.28 billion (97%) out of the accumulated issued amounts of KRW 52.97 billion used in the local small business stores. - Hwaseong made the budgeted payment of KRW 30 billion to 15,412 small businesses and KRW 92 million to 37 small business owners to compensate - The task force team of small business owners and 13 city officials was set up to relate to the local currency issuance and the COVID-19 emergency livelihood support with the eup-myeon-dong officials and 12 merchant associations taking the role.

- Hwaseong worked with the city council to be able to adjust the budget for the small business emergency livelihood relief. The surge in local currency issuance led to the establishment of the local circulatory economy system, playing a positive role for invigorating the local economy. - The Act on Local Love Gift Card Use was amended to put into place the legal grounds which were lacking for the issuance of local currency, and the government was involved to lay the legal and institutional foundation to support small business owners in relation to the COVID-19 emergency livelihood expense support.

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- A survey was conducted after the COVID-19 pandemic to analyze and compare the survey outcomes of total issued amounts of local currencies, used amounts, COVID-19 emergency livelihood supports, and community member satisfaction in 31 cities and guns (basic local municipalities) in Gyeonggi-do. - The Gyeonggi Research Institute, Gyeonggi-do’s affiliated institution, conducted the evaluation study. The study findings revealed that Hwaseong is the only municipality that had small business sales surge by 17% or more amid the COVID-19.

- Local currencies(credit card) increased in issued amounts by 30 times from KRW 17.5 billion in 2019 to the accumulated issued amount of KRW 532 billion as of Oct. 2021. 590,000 people signed up for the local currency and are using it at 37,132 stores. - 15,412 small business owners were supported with the emergency disaster relief, first in Korea, up to KRW 2 million per business, and the findings from the own satisfaction evaluation revealed that 84% of those surveyed were satisfied or very satisfied and 95.9% were satisfied with the simple application and quick payments.

○ Evaluation findings - Hwaseong issued the local currency for a total of KRW 263 billion in 2020, 15 times increase from KRW 17.5 billion issued in last year, out of which KRW 239.3 billion (91%) were used locally with the issued amounts. The local currency users counted 450,000 people, 51% of the population. The city had the promotional event in Apr. 2020, which paid additional KRW 100,000 when loading KRW 200,000, leading to the local currency issuance of KRW 41.5 billion with the consumption of KRW 37.7 billion (91%). This outcome was highly regarded, earning the city a Gyeonggi-do Governor Award for the highest rank in local currency issuance and used amounts. ○ Impact on policy enforcement - The local currency expansion suppressed consumption at large or franchise stores with the surge in sales for self-employed small business owners, having positive impacts on the invigoration of virtuous circle economy, in which people consume locally. ○ Sustainability of Policy - The local currency is not an one-off support policy, but promotes community consumption for small business owners. Hwaseong made it common to issue and use the local currency, laying the foundation for a local virtuous circle economy to come.

- The expansion of local currency issuance helped establish the policies to support small business owners with the budget input from the central government, Gyeonggi-do, and Hwaseong, contributing to actual sales increase for small business owners, who struggled due to the COVID-19. In addition, the cooperation of the central government and Gyeonggi-do and the input of Hwaseong’s own budget helped Hwaseong take a lead to push for the supports to have small business owners stabilize business management under the COVID-19. - Hwaseong appealed for the inconsistencies and limitations of the small business owner protection and support laws and submitted to the National Assembly and the government the Letter of Complaint for Nationwide Small Business Livelihood Support to Overcome the COVID-19 Economy Emergency, which led to amending the announcement of the Emergency Welfare Support Act (Apr. 6, 2020). This helped deem the self-employed business owners, who struggled to maintain their livelihood, as under crisis and provide supports for them, putting the statutory and institutional grounds in place to directly support small business owners.

- Hwaseong’s COVID-19 support policies engaged the civil organizations, merchant associations, and Hwaseong to work together to achieve the sustainable development goal for decent work and economic growth. - Role of merchant association: Hwaseong has 12 merchant associations, coalition of small business owners, which publicized the store enrollment to help small business owners with the sales of KRW 1 billion or less actually receive benefits. For the emergency livelihood support, they were fully involved in publicizing the small business owner support policy, which provides supports for 15,412 businesses, by working with the merchant association members to help small business owners receive the livelihood support. Also, the autonomous disaster prevention team was formed to engage in active quarantine activities to help the community members safely use restaurants and shops. - Role of civil organization: The civil organizations, including the Tong and Ri leaders and the residents’ association, were fully involved in publicizing for the community members the purpose of issuing local currency and the emergency livelihood support policy at the village meetings, while sharing with small business owners in Hwaseong their pains from struggling, enticing the voluntary engagement of the community members.

- As novel diseases and disasters, when measures are unprepared, may affect a number of community members and small business owners. the policy decision making engages the private and public stakeholders to decide their own roles with systematic supports to help the community members maintain their businesses stably and minimize damages so that they can gain the independence back. - Policy advancement and improvement: The expansion of local currency issuance requires the active budget support from the central government and the relentless support of a local municipality so that a policy small business owners need does not come to a halt and fully supports small business owners to actually increase sales. Laws, ordinances, and regulations need to be overhauled to swiftly support and protect the small business owners struggling from the disaster, like the COVID-19, which will enable to build a community that prompts swift supports for a stable life under the pandemic.