Coronavirus: Asia-Pacific

Small businesses in S. Korea reel from new clampdown

Health authorities also warn current wave of infections may be harder to limit than before

SEOUL • A new round of social distancing rules took effect yesterday in the South Korean capital, dealing a blow to small-business owners despite brighter hopes for economic recovery after earlier success in battling the coronavirus.

The measures include closures of nightclubs and karaoke bars, curbs on eating in cafes and restaurants, fewer night-time public transit services, and limits on religious services, weddings and funerals for the next two weeks.

"I feel like I've been left alone in the dark," said Ms Jung Gong-dan, who runs a pub near Seoul's Itaewon district, saying she has lost hope after a ban on dining in restaurants after 9pm.

The "emergency pause" in activity in the densely populated capital and surrounding areas aims to damp a resurgence in outbreaks in offices, schools and small gatherings that have combined to drive a third wave of infections.

Asia's fourth-largest economy returned to growth in the third quarter, reversing its sharpest contraction in more than a decade, as the government pushed through stimulus measures and major trading partners eased virus curbs.

The benchmark Kospi stock index hit its all-time high yesterday for a dramatic gain of 83 per cent from its low this year - soon after the pandemic hit in late March - as authorities cut interest rates and poured money into the financial system.

But the revival of financial asset prices has had little spillover into the real economy, as owners of small businesses and street shops shut down amid new restrictions.

"I'm planning to launch a takeout wine sale with discounts, which is the only way to head off a cash crunch, given revenue drops throughout the year," said a wine bar owner, who runs two stores in downtown Seoul, and asked to be identified only by her surname, Kim. She said she had bought supplies worth 10 million won (S$12,100) in expectation of a surge in year-end reservations.

The usual bustling activity and long queues in many shopping streets and nightlife areas in Seoul were missing on Monday evening.

Without government help, said Ms Jung, it would almost be easier to shut permanently than try to stay open under the new curbs, after large losses incurred in the year's earlier outbreaks.

The government has yet to propose a new round of stimulus measures, but yesterday, the main opposition party called for billions of dollars to be diverted from next year's budget proposal as subsidies for those hit by the pandemic.

The health authorities have warned the current wave of infections might be harder to limit than before, as most occurred in the wider community around Seoul.

Young people voiced frustration and disappointment at the latest rules, but many also supported stronger action.

"It is stifling, and so sad that we have to take risks just going outside and meeting someone, but it's the right thing to do and hopefully we'll be able to go back to normal soon," said university student Shin Jong-hyun, 29.


A version of this article appeared in the print edition of The Straits Times on November 25, 2020, with the headline 'Small businesses in S. Korea reel from new clampdown'. Print Edition | Subscribe