[An image of credit cards. Photo credit: Pixabay]

South Korea launched its new livelihood recovery consumption coupon program on July 21 as a measure to ease the financial burden on citizens amid rapidly rising inflation. 

The initiative is the government’s response to growing economic pressures affecting households and small businesses nationwide.

The government announced the coupon system on June 19, followed by parliamentary approval when the National Assembly passed the enabling legislation on July 4.

The program aims to reduce economic pressure on citizens and reboot the economy as South Korea’s economy is currently struggling compared to previous years due to elevated inflation rates.

The economic strain has been particularly severe for small and local businesses that have been struggling, especially following the inflation surge that COVID-19 triggered.

These vouchers, which can also take the form of digital points, were distributed to South Korean citizens by the government, with all coupons issued through official government channels.

The coupons are available in various forms, ranging from mobile app points, paper vouchers, and prepaid cards, allowing citizens to choose their preferred format.

Usage of these coupons is typically limited to the area where the citizen’s residence is registered. 

For example, if an individual reported their residence in Busan, the coupons would not be effective in different areas of the country, such as Seoul. 

Although the coupons are available to all citizens of South Korea, the primary target communities include small business owners, low-income families, and the elderly.

Distribution methods vary by region, with some areas utilizing digital platforms such as banking applications, while others distribute them through local social welfare centers.

The program has already shown measurable impact.

GS25, a South Korean convenience store chain, where the coupons are accepted, reported a 230% increase in sales.

However, public perception about this topic differs, as some people welcome this new system, while others argue that it comes “too late” after months of price inflation. 

The program provides both an economic stimulus and a temporary solution for those struggling to cope with rising prices of everyday items that continue to increase.

Moreover, the initiative may promote greater adoption of digital payment systems in regions where such methods were not previously common or effectively used.

What distinguishes South Korea’s livelihood recovery consumption coupons from similar programs in other countries is their government-centric approach, involving local governments.

The system offers limited flexibility due to restrictions on local currency, specific stores, and designated areas or regions for use.

Coupon distributions began on July 21st, organized based on the last digit of citizens’ birth years.

Beginning July 26th, distribution requests became freely available to anyone wishing to participate in the program.

The success of this initiative will likely influence future government responses to economic challenges.