The Korea Herald


‘Consumption will lead to more consumption’

Presidential hopeful Lee Jae-myung expresses confidence about bringing housing prices down

By Kan Hyeong-woo

Published : July 2, 2021 - 16:09

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Gyeonggi Gov. Lee Jae-myung prepares for an online press conference Friday, a day after announcing his presidential bid. (Yonhap) Gyeonggi Gov. Lee Jae-myung prepares for an online press conference Friday, a day after announcing his presidential bid. (Yonhap)
Gov. Lee Jae-myung of Gyeonggi Province asserted his determination to root out unfairness and inequality in a recorded speech released Thursday, in which he announced his presidential bid. The video was made public on social media.

Reiterating his signature policy, universal basic income, Lee vowed to turn a crisis into an opportunity to make Korea a world-leading economy, with the public sector paving the way for the private sector to increase investment and innovation.

Similarly, the Gyeonggi governor held an online press conference Friday to discuss his campaign platform. Below are the reporters’ questions and his answers.

Q: Your signature policy, universal basic income, is facing criticism about its real-life feasibility. Some say the policy has become a less prominent part of your platform lately. Are you still pushing for it?

A: The thing about universal basic income is that it has never been fully introduced anywhere in the world. Experts who side with me say it can play a role in alleviating polarization and inequality if it is provided in the form of local currencies, solving the problem of the spending structure, which is a major reason behind the low growth.

Consumption will lead to more consumption. That is the multiplier effect. But many still have their doubts. Since it is a groundbreaking new policy, there are concerns about introducing it all at once because the resources might not be available. So a smaller-scale version of (universal basic income) that (the public) can actually feel will have to prove its efficiency. And if people agree with it, we can gradually extend it to more people.

Where public welfare spending is concerned, Korea spends 60 percent of the OECD average. Economically, we are a developed nation. But in regards to public welfare, we are closer to a developing country. So if we expand welfare services, we should do it in the form of local currencies to revive the local economy, instead of providing cash.

The most important thing is to restore fairness. It is also crucial to shift the industrial and economic paradigm to create an opportunity for Korea to soar. These things are much more important. That is why I am talking about them first.

Q: You mentioned the public sector’s role in an era of great changes, such as reforming regulations and expanding infrastructure. Are there any specific plans or examples?

A: In the era of innovation, regulations block innovation. Unnecessary rules need to be scrapped to help companies and individuals innovate. But the rules that guarantee fair competition and restrict unreasonable monopolies need to be strengthened.

When society is not stable, it is right to expand the role of the government. There are times when you need big government. Small government is not always the right path. We have to take the path of expanding the role of government until the economy can continuously grow.

At the core of the crisis is the energy crisis. Countries worldwide face pressure, including carbon border fees, if they do not turn to renewable energy. Leading businesses around the world are saying they will not buy unless companies use 100 percent renewable energy.

The problem is that in our country, there is not enough renewable energy for Samsung Electronics alone. The cost of establishing renewable energy sources has placed a heavy burden on companies. There is a serious risk of losing competitiveness on the global stage. Severe damage will follow if we are late in changing to renewable energy.

If we are half a step ahead, it will be a critical opportunity to lead the world. But that is not possible with efforts from private companies only. We need massive policies at the national level to produce renewable energy so that our country can be at the center of the industry. The Biden administration is carrying out an all-out investment in building infrastructure, leading to rapid economic growth and more jobs.

Q: What do you think is wrong with the current administration’s housing policy?

A: Housing prices have gone up too much, and there are doubts as to whether the government did all it could (to prevent that). As I am part of the current administration, I will take part of the blame. But I believe the housing problem can be fixed anytime with the right policy, strong resolve and trust.

Simply put, the market is decided by supply and demand. The problem is excessive demand and insufficient supply, which have led to surging housing prices. As the prices increase, more real estate speculation happens.

Fundamentally, if people and companies own real estate beyond what they need, such as office space for work or a home to live in, we should prevent them from making profit. We have to enhance tax policies on the acquisition, retention and transfer of real estate, making deals difficult and limiting financial benefits so that (people and companies) cannot create everlasting income from real estate.

If a policy is more efficient than the previous one, it means more people benefit from it. But such a policy faces a lot of resistance and backlash from those with vested interests.

Q: You have mentioned boycotting the Tokyo Olympics over the inclusion of Dokdo on the map of Japan on the Olympics’ website. The games are just around the corner. What is your stance?

A: It is a difficult problem. We gave in on the marking of Dokdo during the PyeongChang Winter Olympics, right? Because it is a territory of which our country is in effective control, it would not have been a problem to mark it back then. But we left it out upon requests from the International Olympic Committee and Japan, didn’t we?

Japan claims that we are invasively in control of the islets. That goes directly against the spirit of the Olympics. I think we cannot let this slide. About this issue, I believe we have to consider boycotting the games despite the pressure so that (our objection) will be recorded in history.

But we should think about the athletes who have worked very hard for this. There are ways to attend the games aside from the national level.