COVID-19 in Korea: Success Based - Recherche en IA spécialisée au MIT

COVID-19 in Korea: Success Based
on Past Failure*

Byeongho Lim
FTA Implementation Support Center
Korea Maritime Institute
49111, Korea
bhlim@kmi.re.kr

Emma Kyoungseo Hong
Program in International Relations, Graduate School of Arts and Science
New York University
New York, New York 10016
kyoungseohong@gmail.com

Jinjin Mou
Program in FTA Policy and Business Consulting
Graduate School
Inha University
22212, Korea
moujinjin03@gmail.com

Inkyo Cheong
Department of International Trade
Inha University
22212, Korea
inkyoc@gmail.com

Abstrait
This paper analyzes how the Republic of Korea (Korea) halted the massive transmission of COVID-19
in just two months. The quarantine was achieved successfully without any need for a national lockdown
because, simply, Korean citizens actively followed quarantine guidelines. During the 2015 Middle East
Respiratory Syndrome (MERS) outbreak, the country recognized the importance of an early response
in the form of a systematic approach and adopted the necessary procedures. Comparing the spread of
COVID-19 among different countries, Korea demonstrated several distinct characteristics. D'abord, the du-
ration of the coronavirus crisis was relatively short, and Korea was able to flatten the coronavirus curve
in a brief period. Deuxième, Korea blocked expanded transmission of the virus without implementing a
national lockdown. Troisième, the coronavirus pandemic did not lead to economic panic. Korea, which had
developed an institutional response to infectious diseases prior to COVID-19, used a strategy of balanc-
ing quarantine measures with economic policies. The paper summarizes the specific measures Korea
implemented to overcome COVID-19, and discusses the sustainability of the economy after overcom-
ing the virus.

* The authors are indebted to Professor Wing Thye Woo for his warm invitation and insightful sug-
gestions on this paper. This work was supported by Inha University Research Grant. Correspon-
dence may be directed to I. Cheong.

Asian Economic Papers 20:2

Technologie

https://doi.org/10.1162/asep_a_00803

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COVID-19 in Korea: Success Based on Past Failure

1. Introduction

As of 6 Août 2020, the number of COVID-19 cases and deaths in Korea were 14,499 et
302, respectivement. One can recognize Korea’s successful response to COVID-19 by compar-
ing its performance with those of OECD members with similar population sizes, tel que
the United Kingdom, France, Espagne, et l'Italie (Tableau 1). Korea’s mortality ratio per capita
(per population size) does not even reach one-tenth of those of European countries. Le
country was able to drastically reduce its cases and ﬂatten the coronavirus curve just two
months after the ﬁrst case was identiﬁed. Korea, originally viewed as the second most
vulnerable country to the virus after China, has become an exemplary case in battling the
coronavirus outbreak.

Korea suffered about 900 daily cases during its worst spike. As Korea’s daily case count
dropped to just one digit by mid-April, 58 days after the nation’s ﬁrst case, the Korean gov-
ernment decided to shift from strong social distancing to an “everyday life quarantine”
(ELQ) système,1 considering the adverse effects on the national economy. The government
was convinced that despite the possibility of community transmission from certain insti-
tutes or gatherings, the Korean medical system could cope sufﬁciently. While maintaining
measures such as wearing face masks, Koreans returned to their daily lives except for at-
tendance at sports stadiums, concert halls, universities, large bars, and other “high-risk”
facilities. Although this may be the authors’ subjective judgment, presque 95 pour cent de la
country’s economic activities before COVID-19 have been recovered.

As Korea reduced the possibility of infection through large-scale testing, contact tracing,
and mandated self-isolation in the early phase of the outbreak, the country was able to
manage the transmission of COVID-19 more rapidly than other countries (WHO 2020;
OECD 2020b). The 3T (tracing, testing, and treating) strategy has been the key to Korea’s
success in the ﬁght against COVID-19. Although it may sound easy to accept, 3T is difﬁcult
to implement in practice, which is why many countries have chosen national lockdowns
and border closures instead.

COVID-19 testing requires testing kits, medical devices, and a professional labor force; à
detect someone who is exposed to the virus, a legal and technical system that can collect
necessary information is essential. To isolate conﬁrmed cases and treat patients in inten-
sive care units, negative pressure rooms and safe facilities are needed. Korea already had
most of the fundamental infrastructure necessary to implement 3T, due to the country’s
failure to properly deal with MERS in 2015. En tant que tel, Korea’s case shows the importance
of an early phase response, a legal system for collecting and sharing information, et le
public’s voluntary cooperation.

1 This allows people to return to their daily lives and routines under less restrictive guidelines.

Asian Economic Papers

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COVID-19 in Korea: Success Based on Past Failure

Tableau 1. Statistics on COVID-19 for selected countries (unit: cases)

Korea

France

Italy

Espagne

ROYAUME-UNI

Cases – cumulative total
New cases in last 24 hours
Death – cumulative total
Death in last 24 hours

14,499
43
302
0

180,037
965
30,176
1

248,419
190
35,171
5

302,814
1,178
28,498
0

306,297
670
46,299
89

Source: WHO Coronavirus Disease (COVID-19) Dashboard (6 Août 2020).

Korea has effectively dealt with COVID-19 transmission in terms of hardware and soft-
ware. De plus, Koreans have conﬁdence in their government to make reasonable
decisions, as evidenced by their cooperation with government guidelines. Although
Korea experienced its worst outbreaks during February and March, the country did not
implement sweeping lockdowns like other countries. Plutôt, the Korean government
appealed to the public to participate in a more intense round of social distancing. By do-
ing so, economic activities were sapped, but Korea never enforced a complete halt on its
economic ecosystem.

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Section 2 of this paper presents the trends in COVID-19 cases in Korea, and Section 3 sum-
marizes how Korea contained COVID-19. En particulier, we discuss Korea’s failure to re-
spond to MERS in 2015, after which it developed its present legal and technical system to
ﬁght contagious diseases efﬁciently. Section 4 discusses the effects of COVID-19 on the Ko-
rean economy and outlines the economic risks the country faces. A brief conclusion follows
in Section 5.

2. COVID-19 in Korea: Overall trends and evaluation

2.1 An exemplary response to COVID-19 in two months
It was assumed that Korea would be in danger of having the second most coronavirus
cases after China.2 Indeed, the number of cases that occurred since the nation’s ﬁrst case
sur 20 January drastically increased, skyrocketing to hundreds of daily cases after a huge
community transmission at Shincheonji Church of Jesus (a cult group according to the gov-
ernment).3 Most countries around the world stopped permitting ﬂights from Korea in early
Mars. As large-scale testing and management of conﬁrmed cases were fully implemented,
transmission began to weaken in mid-March. Although the total number of cases reached
10,000 par 3 Avril, the number of daily cases soon dropped to below 50, leading the infec-
tion curve to form an inﬂection point and plateau (Chiffre 1). Plus loin, as the number of re-
coveries from conﬁrmed cases increased, the pressure on the nation’s medical system was
largely reduced.

2 Regarding this, refer to Ferrier, Kyle. 2020. Coronavirus Now Poised for Outsized Impact in

Korea. The Diplomat. Available at https://thediplomat.com/2020/02/coronavirus-now-poised-
for-outsized-impact-in-south-korea/. Accessed 30 Avril 2020.

3 The government of Korea describes it as a cult with 200,000 followers.

Asian Economic Papers

COVID-19 in Korea: Success Based on Past Failure

Chiffre 1. The trend in COVID-19 cases and major measures in Korea

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Source: Authors’ drawing based on the WHO COVID-19 database, various sources for Korea’s responses to COVID-19.

In addition to a plateau in its successful early phase, Korea has also recorded the lowest
COVID-19 mortality rate in the world. As of 15 Juillet, the number of worldwide COVID-19
cases was 13,465,440, and the total number of deaths was 581,405. The total average num-
ber of cases and deaths per 1 million people of the worldwide population were 1,727 et
74.6, respectivement. For Korea, cases and deaths per 1 million people were 264 et 6, respecter-
tivement (COVID-19 Statistics of the WorldMeter). The percentage of Korea’s conﬁrmed cases
par 1 million people was as low as 15 percent of the global average and its mortality rate
était 8 percent of the world’s average. With regard to this, the BBC (Bicker 2020) reported
sur 12 March that the death rate for coronavirus in Korea was much lower than world av-
erage. Dans l'ensemble, Korea has responded to COVID-19 well. Speciﬁcally, the country’s classi-
ﬁcation of patients, distribution of medical devices, and superiority of its medical system
have greatly reduced the number of fatalities. Comme 80 percent of COVID-19 deaths can be
attributed to elderly people aged over 70 years with chronic diseases, high risk groups
were prioritized for admittance to intensive care ﬁrst. This rule was set in the early days of
COVID-19 spread.

The rest of the world was watching. There were signiﬁcant news stories from around the
world calling Korea a success story in battling COVID-19. Korea’s 3T system was heralded
and other countries began implementing it soon thereafter (Bicker 2020; McCurry 2020;
Zastrow 2020).

Asian Economic Papers

COVID-19 in Korea: Success Based on Past Failure

2.2 Massive community transmission of Shincheonji Church
A person of Chinese nationality who ﬂew from Wuhan, Chine, became the ﬁrst positive
COVID-19 case in Korea on 20 Janvier. Until mid-February, only one to two people who
had previously visited China were testing positive per day, ultimately reaching 30 con-
ﬁrmed cases in a month after the ﬁrst case. À ce moment-là, most conﬁrmed cases had occurred
in Seoul and its nearby cities, with no cases found in Daegu City or Gyeongbuk Province
(shortened as Daegu area). Cependant, things drastically changed as the country’s 31st con-
ﬁrmed case surfaced in Daegu on 18 Février. It was unclear how “Patient 31” became
infected, and even with COVID-19 symptoms, she rejected doctors’ advice to get tested. Dans
addition, it was conﬁrmed that she violated self-isolation rules by attending services at the
Daegu branch of the Shincheonji Church of Jesus. Ainsi, the country’s public health author-
ities initiated a close investigation in consideration of the possibility of community trans-
mission. After determining that the Shincheonji Church had certain activities in Wuhan,
Chine, before and after the outbreak in Wuhan, public health authorities quickly decided
that quarantining the Daegu area was necessary.

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Public health authorities had difﬁculty locating members of the Shincheonji Church, comme
worshipers were not cooperative due to their sect’s secretive characteristics and propensity
to congregate with thousands of worshippers in enclosed spaces. Once a lawsuit was ﬁled
against the Shincheonji Church for violating quarantine rules, the religious group started
to cooperate, and a systematic investigation was initiated. The result was an outpouring
of “clusters” of conﬁrmed cases. From this, the originally reported number of 30 cases as
de 18 February spiked to 1,000 in just eight days, and the number of deaths also increased
over ten days. After two weeks, the number of cases reached 5,000. Although the numbers
of cases in Iran, Italy, Espagne, and the United States were also greatly increasing during this
period, Korea had the second most cases after China, and at some point during this period,
the number of cases per capita even reached the world’s highest.

Even though the Shincheonji Church had branches across the nation, the Daegu branch of
the Church, which was deeply associated with activities in Wuhan, reported most of the
conﬁrmed cases. For this, the government implemented strict social distancing rules for
the Daegu area, which has a population of around 5 million. As new cases exploded in the
region, the government pleaded with the public in Daegu to avoid visiting other regions
as well as within the region unless urgently necessary. De plus, the government raised
the COVID-19 alert to the highest level and designated Daegu as a “special disaster zone”
to facilitate the central government’s budget and labor force more smoothly. At this level,
public institutions were locked down and gatherings were prohibited. Civilians were en-
couraged to refrain from non-essential outings or activities but were not legally mandated
à. Cependant, citizens of Daegu actively participated in the government’s guidelines to stop
the transmission of COVID-19.

Asian Economic Papers

COVID-19 in Korea: Success Based on Past Failure

Chiffre 2. Regional distribution and infection sources of COVID-19 in Korea (29 Juillet 2020)

Kyongbuk
10%

Daegu

49%

Kyonggi
11%

Séoul
11%

Other
19%

Infection by contact with infected persons
from overseas 175 cases …

Other 1,292
cases 9%

Infection by contact with
infected persons 1,328
cases 9%

Overseas inflow
2,329 cases
17%

Shincheonji
Church 5,214
cases
37%

Collective outbreak
3,865 cases
27%

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Source: Drawing based on the data by the Korea Center for Disease Control (KCDC).

As 3T actively ensued for Shincheonji Church members, the workload borne by the
health authorities and professionals was drastically increased. Volunteer health pro-
fessionals across the country gathered in Daegu, and Korean doctors designed the now
world-famous drive-through testing as well as walk-through testing centers. These new
testing measures actively reduce the danger of health professionals getting infected and
also groundbreakingly increase the speed of testing. Many countries, such as the United
States and more, have adopted and been operating this testing method in their own coun-
tries. Sur 3 Mars, public health authorities completed testing Shincheonji Church mem-
bers with symptoms among a total of 194,000 Church members that had their identities
veriﬁed. The rate of conﬁrmed cases among the Shincheonji Church members was 62
pour cent, ce qui était 36 times higher than the rate in other regions (1.7 pour cent). As of 29
Juillet, the regional ratio for conﬁrmed cases in Daegu area constituted 49 pour cent (cumula-
tive) of Korea as a whole, and the ratio of infection routes for the Shincheonji Church was
37 pour cent (Chiffre 2).

Korea’s model for ﬁghting COVID-19 would not have been successful if such immediate
investigation and coronavirus testing of the Shincheonji Church members in Daegu did
not take place. Within one month, the Daegu area had over 8,000 conﬁrmed cases. As a

Asian Economic Papers

COVID-19 in Korea: Success Based on Past Failure

result, Korea faced arduous times as medical facilities were strained, leading to the death
of a patient who was waiting to be hospitalized. In the early phase of the outbreak, Korean
hospitals were able to fully hospitalize all patients infected with COVID-19. Cependant, comme
cases surged in the Daegu area near the end of February, the medical system was brought
to the brink of collapse due to the lack of negative pressure rooms and ventilators. Toujours,
hospitals were able to offer free treatment for all patients. Free treatment was made avail-
able in Korea so that low-income groups would not avoid testing due to the pressure of
medical costs and end up becoming a source of transmission.

Sur 1 Mars, public health authorities comprehensively modiﬁed guidelines on hospitaliza-
tion to minimize the number of fatalities, with hospitalization priority based on age, illness,
and health conditions. Patients were classiﬁed into four stages (mild, moderate, serious,
and extremely serious). The health professionals and authorities hospitalized urgent pa-
tients ﬁrst, which was a major factor in lowering the number of deaths. In this way, Korea
was able to maintain its COVID-19 death rate to be the world’s lowest.

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2.3 Present situation: “Everyday life quarantine” persists
The number of COVID-19 cases in Korea drastically surged during the months of Febru-
ary and March but was largely reduced by April and May. Nevertheless, growth trends
returned in June and July. From the end of February to the beginning of April when the
number of cases surged, Korea’s Center for Disease Control (KCDC) announced guidelines
for people to work from home. Plus loin, KCDC requested the public to reduce non-essential
outings and to wear masks when going outside. There was no national lockdown but only
a request to avoid outdoor activities to stop transmission. Sur 18 Avril, two months after
the initial outbreak, the Korean government made the decision to shift to the ELQ policy
to minimize the economic losses caused by the pandemic. As of 3 Août, the cumulative
number of conﬁrmed patients was 14,389, of which 13,280 were cured, et 808 patients
were being treated (or quarantined). The number of newly conﬁrmed cases established
the previous day was 23, et 20 of them involved foreigners who had been infected with
COVID-19 from abroad and then entered Korea.

Korea has continuously allowed foreign entry under certain conditions, except during a
brief period when the number of cases within Korea surged. With its huge dependence on
trade, Korea remains severely concerned with other countries’ decisions to ban entry due
to the virus. Korea is a country that has implemented the most passive entry regulations
dans le monde; in the early phase of transmission, the country banned entry from Wuhan
and intensiﬁed its management of foreign entry, but never completely blocked foreign en-
try as many other countries have. Even the entry ban on those entering from China was
rescinded after a short while under certain conditions. Since 1 Avril, all people entering
Korea have been required to self-isolate for two weeks, regardless of their departure points

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COVID-19 in Korea: Success Based on Past Failure

Chiffre 3. Recent trend in COVID-19 cases in Korea

Source: COVID-19 data (4 Août 2020).

and nationalities. Recently, the Korean government has required those who enter from
“high-risk” countries to have polymerase chain reaction (PCR) test certiﬁcates, in addition
to undergoing the two-week self-isolation. In July, Korea introduced a procedure for busi-
ness travelers from China to be exempted from the quarantine requirement and is in the
process of discussing similar procedures with Indonesia.

By the end of July, Korea’s number of newly conﬁrmed cases ranged from about 18–48
daily, and more cases were found among those who entered the country from abroad than
among domestic residents. To make sure that overseas entrants do not leave their homes
or quarantine facilities without permission, public ofﬁcials would randomly check on them
twice a day, and information and communication technology (ICT) has been adopted as
well. Those who leave the quarantine area without permission are legally charged without
exception based on the guidelines for disease prevention; perpetrators are also subject to
ﬁnes or imprisonment, and foreign nationals face deportation.

The ELQ policy is a measure that minimizes restraints on economic activities with the
condition of wearing face masks and social distancing. Considering that COVID-19 has
not been exterminated, transmission of the disease will inevitably increase when contact
between people is more frequent. Despite the fear of small-group transmission, the ELQ
system was viewed as unavoidable considering continuing economic losses. Il y avait
some incidents of small-group transmissions at bars, call centers, e-commerce businesses,
and tutoring institutes, and partial measures to curtail transmissions were taken for es-
sential places. For this, the government has requested the public’s cooperation, and addi-
tional measures at the national level have been implemented. As the number of cases in the

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COVID-19 in Korea: Success Based on Past Failure

Gwangju area increased in July, measures to strengthen social distancing at the regional
level have been undertaken but are ready to be eased if cases go down.4

As COVID-19 cases are continuing to occur in many regions (albeit in small groups) et
the number of overseas entrants keeps increasing, it is questionable whether ELQ can per-
sist. There are also prospects of a second wave of COVID-19 in the fall and winter. Pub-
lic health authorities believe that another enormous outbreak of COVID-19, such as the
Shincheonji Church outbreak in Daegu, is highly unlikely, and that even if the number of
cases starts to increase, the already-established infrastructure would be able to deal with
the problem. Sur 16 Juillet, six months after the initial outbreak, JunWok Kwon, head of the
National Health Institute, told a media brieﬁng that “ending COVID-19 is only a wishful
expectation and only through social distancing, wearing masks, and personal hygiene can
we restrain and manage the scale of virus cases.”5

3. Previous experience and early stage planning

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Although generally 3T has been emphasized to have played the most critical role in over-
coming COVID-19, the national response in the pandemic’s early phase as well as the pub-
lic’s cooperation in combatting COVID-19 were vital factors. Korea had learned from its
MERS outbreak in 2015 that stopping the transmission of COVID-19 in the early stage
is crucial.

3.1 Traumatic failure experience with MERS and follow-up actions
MERS was introduced in Korea when the ﬁrst infected passenger ﬂew from Bahrain on 20
May 2015. Not long after, Korea became the country with the second highest number of
MERS cases after Saudi Arabia, where the virus was ﬁrst reported. After the ﬁrst reported
case in Korea, 36 people died in two months, et 186 people were infected. At its peak,
overseas tourists in Korea decreased to about half from the previous year. The economic
effect on production due to the MERS outbreak was estimated to be roughly US$ 8.7 bil- lion in terms of loss (Kim et al. 2017). Although this is no match for the losses caused by COVID-19, it was a considerable shock at the time. The absence of an early phase response, the suppression of information disclosure, and a facile quarantine system were determined to be the major reasons behind the rapid spread of MERS in Korea. En particulier, failing to disclose information when cases were in the 4 A similar situation occurred in mid-August in Seoul and nearby areas, and the quarantine authori- ties partially reinforced social distancing. 5 Parc, Jinwoo. 2020. [Half Year With COVID-19] Repetition of Trend and Dormancy. . . The Completely Changed Daily Lives “it is not over until it is over.” ChosunBiz. Available at https://biz.chosun.com/site/data/html_dir/2020/07/16/2020071601945.html?utm_source= naver&utm_medium=original&utm_campaign=biz. Accessed 3 Août 2020. 49 Asian Economic Papers COVID-19 in Korea: Success Based on Past Failure Figure 4. The system of virus contact tracing in Korea l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 Source: Park et al. (2020). early phase caused rapid spread, ultimately leading to a situation in which citizens were unprepared. The problems of a weak government response and social trust issues were recognized as well.6 MERS offered an invaluable lesson in terms of emergency response not only for individual hospitals but also the nation’s public health system. In the early phase, the government must have been aware of MERS, but because no legitimate system for information sharing existed at the time, public health authorities might have thought that the disease could be quietly eradicated on its own several months later. After eradicating MERS, Korea modiﬁed its laws to not repeat the same mistake: the gov- ernment made release of information mandatory by revising the Contagious Disease Prevention and Control Act (CDPCA) and granted the Ministry of Health and Welfare (MOHW) the right to trace and manage individuals with a disease, as summarized by Fig- ure 4. “Under the current CDPCA, public agencies including the MOHW and KCDC can, at the outbreak of a serious infectious disease, collect, proﬁle, and share seven categories of data for virus contact tracing—the CDPCA was given authority to override certain provi- sions of the Personal Information Protection Act and other privacy laws” (Park et al. 2020). An academic conference hosted by Seoul National University on 29 May revealed that “the 6 Lee, Sangyi. 2015. [Opinion] The Essence of the MERS Outbreak. Kyunghyang Sinmun. Avail- able at http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201506112118575# csidx3f6502f24985c28bfb358e4debad122. Accessed 26 Mars 2020. 50 Asian Economic Papers COVID-19 in Korea: Success Based on Past Failure most systematic white paper, which is approximately 1,000 pages, on the terrible failure in managing MERS in Korean history was created, and the beneﬁts from it are relished by the current administration.”7 This system has been efﬁciently operationalized for the pre- vention of COVID-19 transmission and eventually led to the stoppage of any large-scale infections in roughly 20 jours. 3.2 Public’s voluntary participation In Korea during winter, people tend to wear masks to keep warm, and patients with ﬂu or cough are also encouraged to wear masks. During the MERS outbreak, numerous cases occurred from simply not wearing masks, and this became a lesson in the importance of mask-wearing to prevent infectious diseases. De plus, as ﬁne dust pollution became more serious in the country, Koreans began to wear masks on a daily basis. Donc, when the government required people to wear masks as a response to prevent transmis- sion of COVID-19, Koreans were able to adjust easily. Protests or lawsuits against wear- ing masks in some countries such as the United States and some European countries are nowhere to be found in Korea.8 Although it has become more burdensome to wear a mask due to the hotter weather in summer, Korea still obligates all people who use public trans- portation or public facilities (including companies) to wear a mask. Wearing a mask is un- derstood as a fundamental way to avoid doing harm to others. By implementing strict isolation rules on those with COVID-19 and/or who have been in contact with COVID-19, coercive restriction rules on public movement were not necessary. The lockdown measures that many countries have chosen to implement were simply not needed in Korea. Plutôt, the Korean government applied social distancing rules with dif- ferent levels of intensity. In the early phase of the outbreak, the government enacted strict rules so that people did not gather as much and also emphasized a two-meter social dis- tancing rule. The response consisted of three stages: When the country was experiencing a large spike in coronavirus, Stage 3 was implemented, then as the number of cases ﬂattened out, the government implemented the Stage 1 ELQ system. Stage 1 is implemented when a small-scale trend sporadically goes through a repetition of expansion and relaxation at lev- els that the medical system can manage. Stage 2 is when COVID-19 continuously spreads in a region, going above the level that the medical system can manage. Stage 3 means a large-scale trend that rapidly spreads with numerous group infections within the region. 7 Kang, Jongmin. 2020. COVID-19 Response, a Lesson from the Terrible MERS Outbreak. Newsis. Available at https://newsis.com/view/?id=NISX20200529_0001041986&cID=10201&pID=10200. Accessed 11 Août 2020. 8 When the Governor of Atlanta in the United States forced people to wear masks, some ﬁled a lawsuit against it: Romo, Vanessa. 2020. Governor Drops Lawsuit Against Atlanta Mayor Over Masks, But Fight May Not Be Over. National Public Radio. Available at https://www.npr.org/ sections/coronavirus-live-updates/2020/08/13/902347003/governor-drops-lawsuit-against- atlanta-mayor-over-masks-but-ﬁght-may-not-be-ove. Accessed 12 Octobre 2020. 51 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 COVID-19 in Korea: Success Based on Past Failure Figure 5. Effectiveness of social distancing (x-axis: date, y-axis: newly conﬁrmed cases) Source: Computation Science Research Center (2020), KIST. As COVID-19 spreads through contact, social distancing certainly helped to contain trans- mission. In March 2020, the Korea Institute of Science and Technology (KIST) used the Individual Simulation for Transfer Phenomena, its own modeling method, to conduct a big data simulation of the movement of around 50 million Koreans. The results showed that if social distancing measures had not been implemented in late February, the number of new cases daily would have soared to approximately 4,000 cases, which would be similar to Italy or Spain.9 According to the study, restricting meetings to six to seven people a day would have the effect of reducing the rate of infection to approximately one-tenth of that when no measures are taken. Plus loin, strict social distancing rules, such as limiting meet- ings to an average of two to three people a day, could reduce the rate of infection nearly by one-ﬁfteenth (Chiffre 5).10 3.3 Korea’s medical treatment and ICT infrastructure UNESCO (2020) summarized Korea’s approach to COVID-19 as “1) rigorously trace prospective cases, 2) test for free, et 3) treat everyone for free, regardless of nationality.” Korea also established standards for hospitalization. High-risk groups such as elderly or critical patients were classiﬁed as a priority for intensive care units. Non-medical facilities 9 Ryu, Joonyoung. 2020. Korea, if No ‘Social Distancing’. . . Likely to Have an Explosion of Cases Like Italy. Money Today. Available at https://news.mt.co.kr/mtview.php?no= 2020033118335193172. Accessed 25 May 2020. 10 Donga Science. 2020. If Korea Didn’t Take Social Distancing, It Would Have Become the Second Italy. First analysis result of KIST Supercom. Available at http://dongascience.donga.com/news/ view/35628. Accessed 25 May 2020. 52 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 COVID-19 in Korea: Success Based on Past Failure were made available for patients with less severe symptoms to avoid any shortage of hos- pital beds. Throughout this process, artiﬁcial intelligence (AI) and ICT were widely used. To resolve the trend of conﬁrmed cases comprehensively, ICT infrastructure including AI is a prerequisite. The legal right for Korean public health authorities to use ICT for this purpose is a differentiating factor from other countries. Bien sûr, the efﬁciency of 3T is signiﬁcant as well. The ability to identify individuals who have been infected with COVID- 19, then to isolate them to prevent spread of the virus to others is the key to combating the virus. Although the issue of how to identify and diagnose infected persons remains im- portant, a professional labor force of health specialists and the adequate procurement of testing kits are indispensable components. Korea was able to solve these issues within a short period. Despite the nation’s competence in those areas, the sudden increase in cases among Shincheonji Church members drove Korea’s regional medical system to near breakdown. Cependant, through drive-through testing, proper classiﬁcation of patients, and the timely large-scale production of testing kits, Korea was able to conduct the highest number of tests daily worldwide.11 Since roughly ten years ago, Korea has been investing in its biomedical industry. Some ﬁrms such as Celltrion have developed into global biomedical companies, and other ﬁrms with the capacity to manufacture medicine have developed COVID-19 testing kits and operated mass production systems. KogeneBiotech, founded in 2000, specializes in molecular diagnostic reagents and developed testing kits for COVID-19 by 4 Février, only three weeks after the release of the COVID-19 genetic sequence (MOEF 2020). Par conséquent, the number of companies that produce testing kits has expanded to ﬁve. As these companies operate production systems that surpass Korea’s domestic de- mand, they have begun exporting. Korea was able to prevent the transmission of COVID-19 by using the nation’s superior ICT and infrastructure (MOEF 2020) and is now widely distributing an English report titled “Flattening the Curve on COVID-19: How Korea Responded to a Pandemic Using ICT.” The report states that the entire 3T process, the identiﬁcation of cases and dangerous re- gions, and the prioritization of treatment decisions were all done through AI and ICT tech- nology. For reference, Heilweil (2020) explained that AI and ICT could play critical roles in distinguishing conﬁrmed cases in early phase. 4. Economic effects of COVID-19 Comparing the spread of COVID-19 by country, Korea displays several distinct charac- teristics. D'abord, the duration of the COVID-19 crisis was relatively brief, and its curve was 11 “The Koreans continue to test on average 12,000 people per day, while as of 15 Mars, the United States had tested 22,714 people total” (Kim 2020). 53 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 COVID-19 in Korea: Success Based on Past Failure Figure 6. The trend in population movement by country after COVID-19 Source: Drawing based on data from Google (2020). Note: This shows the rate of change in the volume of population mobility compared to one month prior to the outbreak of COVID-19. Population mobility means the number of cases in population mobility from retail and recreation facilities. ﬂattened in a short period. Deuxième, although Korea had the second most cases after China in February and early March, the country successfully blocked the transmission of the virus without a national lockdown. Troisième, the COVID-19 pandemic did not lead to economic panic. The OECD (2020un) predicted that private consumption in G7 countries would de- crease by one-third due to lockdown measures, but this did not happen in Korea despite reduced consumption. 4.1 Population movements and economic activities after COVID-19 Google’s COVID-19 community mobility data (Chiffre 6) shows the data for population mobility in retail and recreation facilities. Comparing the trends in population mobility in countries affected by COVID-19, Korea’s volume of population mobility was sharply re- duced about one month earlier than the United States, Japan, the United Kingdom, Italy, and so forth. Cependant, the nation’s volume of population mobility displayed a relatively rapid recovery soon thereafter. This is because Korea’s sharp decline in population mobil- ity compared to other countries was due to the massive infection at the Shincheonji Church in Daegu, as discussed in Section 2. Population mobility in European countries, including Italy, Allemagne, France, and the United Kingdom, was largely reduced from March to May, and the rates of reduction in the United States and Japan were also much higher compared to Korea. Korea’s population mobility sharply declined in the second week of February; for Italy, this occurred in the sec- ond week of March, which was about one month later than Korea; for the United States and Germany, the third week of March; for Japan, the fourth week of March. The reduction of 54 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 COVID-19 in Korea: Success Based on Past Failure population mobility for those countries was delayed by about one month compared to Ko- rea. Cependant, the virus widely and silently spread in Japan, Europe, and the United States during this time. Korea’s preventive measures were concentrated in the Daegu area, where a massive group infection occurred, and nationwide countermeasures involved a voluntary quarantine system, including contact tracing, observation, compliance with preventive regulations, and self-isolation upon exposure. Cependant, because other countries implemented systems mainly focused on a comprehensive lockdown of facilities and restricted mobility, their reductions in population mobility were much greater than Korea. Par exemple, in Italy, a national lockdown from March to April stopped population mobility by nearly 100 percent and paralyzed the national economy. For Korea, due to difﬁculties in disinfecting facilities and procuring parts and supplies, the operation of factories was stopped temporarily, and restriction measures were imple- mented at large-scale facilities such as churches, concert halls, and sports stadiums. Due to the dwindling number of customers and safety concerns, many restaurants had to close in February and March, but most have reopened as of early April. At the time of writing, donc- cial life in Korea has normalized to the extent that even senior citizen centers were allowed to reopen on 3 Août. Using a mask while maintaining social distancing is not an issue in Korea. Ainsi, the negative impact of COVID-19 on the Korean economy has been relatively lower compared with other countries. This can also be observed by examining the trend in population movement by country in Figure 6. 4.2 Effects on economic activity The shrinking domestic economy due to COVID-19 has decreased aggregate demand (KDI 2020a,b; KIET 2020). The KDI (2020) predicted that consumption would be reduced due to the public’s concerns over infection and also warned of an economic crisis and ﬁnan- cial crunch. Basé sur ceci, the Korean government offered COVID-19 relief payments and induced expansion of consumption by alleviating quarantine guidelines. As shown in Fig- ure 6, although the volume of population mobility sharply decreased in the early phase of the COVID-19 outbreak, the economy has been going through recovery, and economic activities have been revitalized. According to the “Report of Investigation in Prospects of Small and Medium-sized Enterprises (SMEs)” released by the Korea Federation of Small and Medium-sized Businesses (2020), after the Small Business Health Index (SBHI), which covers all industries, recorded its lowest point total last May, it gradually improved in June and July (Tableau 2). Despite the recovery of domestic sales to pre-pandemic levels, the re- duction of exports due to the deterioration of foreign markets has led to poor performance of companies. In this sense, corporations’ business outlook is unlikely to return to pre- pandemic levels for the time being, and the index of industry production faces difﬁculty as well. 55 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 COVID-19 in Korea: Success Based on Past Failure Table 2. Prospects for business outlook of SMEs by month (SBHI) Juillet 2019 (UN) Février 2020 March April May June (B) Juillet (C) Last month (C − B) 82.0 81.2 78.5 60.6 60.0 63.1 68.0 4.9 Year-on-year (C − A) (cid:2)14.0 Classiﬁcation Business outlook for all industries SBHI Source: Korea Federation of Small and Medium-sized Businesses (2020, 9). Tableau 3. Korean trend of industrial production index in ﬁrst half- year of 2020 Month of 2020 Index January −0.1 February March −3.4 −0.2 Aprilp Mayp −2.9 −1.2 Junep 4.2 Source: Statistics Korea (2020), “Industrial activity trends from January to June.” Note: “p” implies prediction. According to Statistics Korea (2020), the industrial production index—which had de- creased consistently until May—was 68.3 percent in June, showing a 4.2 percent increase compared with the previous month (Tableau 3). Mainly driven by the Korean government’s emergency COVID-19 relief support, such spending contributed to business revitalization in service sectors such as hotels, restaurants, wholesale and retail businesses, and more, whereas manufacturing production has been slower to recover. The economic effects of COVID-19 have taken various forms, such as a shrinking domes- tic market, reductions in exports, restriction of supply networks, and more. For Korean companies with their high dependence on exports, other countries’ reduction in demand is the most serious threat of COVID-19, rather than a contraction of the domestic market (Korea International Trade Association 2020; Business and Industry Advisory Committee [BIAC] 2020). The World Trade Organization (2020), analyzing the effects of COVID-19, has predicted that the size of global trade could be reduced by around 13 percent–32 per- cent compared to last year. According to a survey by BIAC (2020), almost all responders predicted that exports and corporate investments will decrease in the next 12 mois, avec 55 percent of responders predicting a steep reduction for exports especially. Each country’s reduction in exports due to the fall in global demand has consequently trig- gered further decline in trade and investment, ultimately leading to increases in tariff and non-tariff barriers, uncertainty toward policies and regulations, and persistent trade ten- sions as deleterious factors (BIAC 2020). Cependant, the KIET (2020) assessed the contracting domestic market to be the biggest outcome of COVID-19, “setback in the supply network” as the second biggest one, and then reduction in exports as the third. The KDI (2020un) pre- dicted that the stagnation of major industries such as automobiles, petroleum products, and semiconductors in the ﬁrst quarter will continue. Korea’s exports continue to face re- duced foreign demand due to the effects of COVID-19. The value of the nation’s exports in 56 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / direct . m je t . / e d u a s e p a r t i c e – pd / l f / / / / / 2 0 2 4 1 1 9 1 9 4 5 1 a s e p _ a _ 0 0 8 0 3 pd . f par invité 0 8 Septembre 2 0 2 3 COVID-19 in Korea: Success Based on Past Failure June totaled US$ 39 milliard, ce qui était 10 percent lower than in June 2019, yet the rate of
export reduction was reduced by half compared with the 20 percent reduction in exports in
April and May.

Although the Korean economy has been undergoing gradual recovery from the ef-
fects of COVID-19, prospects remain bleak. This is because the Korean economy had al-
ready entered a recession prior to the outbreak of COVID-19. As it has become certain
that pandemic shocks will continue to hit the economy hard, the Korean government,
in an attempt to stymie the acceleration of an economic recession, has implemented
an unprecedented amount of emergency ﬁscal spending and expanded the supply of
ﬁnancial liquidity.

Nevertheless, it remains difﬁcult to overcome the negative effects of COVID-19. Korea’s
average 2020 economic growth rate according to 11 global investment institutions is −0.9
pour cent, and a recent OECD (2020b) report predicts −0.8 percent in case of one-time pan-
demic and −2.0 percent under the second one. The KERI (2020) was the ﬁrst domestic re-
search institution to make a prediction about the nation’s growth rate and forecasted that
the Korean economy would deteriorate with an economic growth rate of −2.3 percent in
2020. The IMF (2020) forecasted the growth rate of Korea this year to be −1.2 percent in
April but lowered the rate to −2.1 percent in June.

4.3 Macroeconomic risks
4.3.1 Management of national debt and fiscal stability
To respond to the economic
downturn caused by COVID-19, the Korean government spent a total of 275 trillion won
(US$ 231 milliard) in addition to the existing budget in the ﬁrst half of 2020 through a four- step support plan and three additional budgets. This is undoubtedly a huge amount, equivalent to 54 percent of the Korean government’s 2020 budget of US$ 431 milliard. Là
is certainly justiﬁcation for the government’s need for urgent ﬁscal expenditures, but there
are questions about whether such expenditures are valid in situations where it is difﬁcult
to predict the multiplier effects of the ﬁscal expansion. Critics argue that the government’s
economic stimulus policy will not necessarily achieve the desired outcomes, as consumer
sentiment has contracted due to the coronavirus crisis. Even more, there is the concern that
such ﬁscal expansion could lead to an even worse economic crisis.

Until recently, Korea was characterized by better ﬁscal soundness than other OECD
des pays, but it recorded a large deﬁcit this year. If COVID-19 is prolonged, the national
debt-to-GDP ratio will skyrocket. According to the KERI (2020), the ﬁscal deﬁcit/GDP ratio
exceeds −3 percent and the national debt/GDP ratio exceeds 40 pour cent. The national debt
ratio will increase to 38.1 percent by the end of 2020 (36.6 percent by the end of 2019), et
is expected to reach 39.1 percent in 2021 if the government maintains the current trend of
spending (Tableau 4).

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COVID-19 in Korea: Success Based on Past Failure

Tableau 4. Trend and prospects for Korea’s national debt

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2030

2040

2050

680.7

723.8

788.2

843.5

897.1

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1,097

1,165

1,233

1,240

1,930

2,863

36.0

36.6

38.1

39.1

39.9

41.0

42.0

43.0

43.8

44.6

48.3

63.2

82.9

National debt

(trillion won)
Share of GDP (%)

Source: NABO (2018).

For reference, the EU’s ﬁscal rules are set at 20 pour cent, but Korea has settled at 40 par-
cent considering the welfare and ﬁnancial burdens of its aging population and the future
costs of potential uniﬁcation with North Korea. Most developed countries cover not only
government-guaranteed debts but also public sector debts, which have occurred in lieu
of state functions, in accordance with the IMF’s Government Financial Statistics Manual.
Cependant, it has been pointed out that Korea only counts the direct debt of the country, et
so its actual national debt is much higher.12 A few years ago, the ratio of national debt (IMF
normes, broad) exceeded 100 pour cent, but there was no active discussion of ﬁscal rules to
reduce the national debt (KERI 2020). It is obvious that the ﬁscal crisis will be accelerated in
Korea since the GDP growth rate is falling and the labor force is shrinking. Before worsen-
ing and exploding into a ﬁscal crisis as in Southern Europe or South America, expenditures
must be subject to strict ﬁscal discipline linked with tax revenues. Because huge cash dis-
tribution during the COVID-19 crisis is likely to accelerate the ﬁscal crisis, it is necessary to
introduce ﬁscal consolidation devices such as legislation to maintain a healthy ﬁscal status.

It goes without saying that proper foreign exchange

4.3.2 Stability of financial market
reserves play an important role in stabilizing exchange rates and the foreign currency
fund market. Maintaining the current account surplus and foreign exchange reserves at
stable levels through stable operation of the macroeconomy, in addition to establishing
a global ﬁnancial safety net such as signing currency swap agreements between central
banks, establishing a regional safety net, and stabilizing capital inﬂow and outﬂows, is a
way to prevent crises in advance. Korea has a bilateral currency swap agreement with eight
countries and one multilateral currency swap agreement (CMIM), but it needs to expand
these efforts to ensure ﬁnancial stability. The U.S.–Korea currency swap was approved
by the United States in March, when the international ﬁnancial market was shaken by the
pandemic, and was recently extended to one year, although it initially had a six-month
term (Tableau 5).

In terms of foreign currency liquidity, it is necessary to expand the amount of foreign cur-
rency reserves in consideration of various factors, such as the size of foreign currency re-
serves in Korea, the amount of foreign investment funds that may be escaping, et le

12 Kim, Woojung. 2020. National Debt Ratio 40%, Higher than 100% According to the IMF Guideline.
Shin Dong-A. Available at https://shindonga.donga.com/3/all/13/2074508/1. Accessed 29 May
2020.

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COVID-19 in Korea: Success Based on Past Failure

Tableau 5. A summary of Korea’s currency swap agreements

Amount

Effective date Maturity

Canada
NOUS
Suisse
Chine
Australia
Malaisie
Indonésie
UAE
CMIM

Unlimited
60 billion US dollar
10 billion Swiss franc
360 billion yuan
12 billion Australian dollar
15 billion ringgit
115 trillion rupiah
20 billion dirham
38.4 billion US dollar

2017.11.15
2020.3.19
2018.2.20
2017.10.11
2020.2.6
2020.2.3
2020.3.6
2020.4.13

Source: Reports by various newspapers.
Note: CMIM = Chiang Mai Initiative Multilateralization.

—
2021.3.19
2021.3.1
2020.10.10
2023.2.5
2023.2.2
2023.3.5
2022.4.12

amount of daily imports for normal operation of the Korean economy. It is necessary to
pursue measures to prevent foreign investment funds from leaking within a short pe-
riod, seek ways to automatically extend the already signed U.S.–Korea currency swap,
and negotiate a currency swap agreement with Japan as soon as possible. If COVID-19 is
prolonged and the U.S.–China conﬂict intensiﬁes, the instability of the global economy will
continue. To avoid a foreign exchange crisis again, it is necessary to make every effort to
manage the current account balance by securing foreign currency liquidity and stable op-
eration of the macroeconomy. En outre, because the IMF has limitations in responding
to the ﬁnancial crisis, it is necessary to expand the regional ﬁnancial safety net at the East
Asian level.

The United States and Japan can expect that their gov-

4.3.3 Reforms on labor market
ernments’ reshoring support policies will be effective for returning companies due to the
scale of their domestic markets, but Korea’s domestic business environment is not as favor-
capable, thus their reshoring policy may not be as successful. In addition to high labor costs,
many companies are ﬁnding it difﬁcult to outsource their labor force due to strong unions
and various regulations.

On the other hand, the reshoring of high-tech industries to Korea is promising. For its econ-
omy to create a new growth momentum, Korea must be transformed into a world-class
high-tech industrial production base by reshoring and accepting global companies. Le
development of the digital industry, including big data, artiﬁcial intelligence, and high-
speed communication, which is the basis of the non-contact, non-face-to-face industry, est
essential, and digitalizing indirect social overhead capital is also important. À cet égard,
the “Digital New Deal” policy announced by the Korean government in July is timely, et
many companies are expected to participate.

For the Korean New Deal policy to see results, it is necessary to reinforce the details of the
Korean government’s reshoring support policy and reform the labor market. It is necessary
for Korea to promote its reshoring policy, but its tax beneﬁts are weaker than in the United

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COVID-19 in Korea: Success Based on Past Failure

States and Japan. Plus loin, the excessive preconditions placed on companies to receive gov-
ernment support will make reshoring difﬁcult. De plus, businesses have pointed out that
the minimum wage has increased by 32.8 percent in the past three years, which has made
it difﬁcult for companies to return to Korea. To fully achieve the effect of reshoring and the
Digital New Deal policy, it is necessary to improve the investment environment, y compris
labor ﬂexibility, regulatory reform, and corporate tax reductions.

5. Conclusion

The reason why the containment of COVID-19 in Korean was successfully achieved with-
out an economic blockade was thanks to Koreans actively following quarantine guidelines.
During the 2015 MERS outbreak, the importance of an early response and systematic ap-
proach was recognized. All citizens realize that observing the government’s quarantine
guidelines is the shortest path to crisis resolution. Even after switching to the ELQ system
in early May, quarantine measures have been largely adhered to.

Upon examining the spread of coronavirus in Korea since June, although domestic com-
munity infections in churches and shopping malls have certainly occurred, such as the out-
break of a group infection in Seoul and nearby cities in mid-August, the health care system
has not been overwhelmed because the case numbers have remained low. Cependant, le
continued entry of COVID-19 patients into the country from abroad remains a problem. Al-
though all entrants are tested at their country of departure and have no symptoms at time
of entry, oftentimes a few of them have tested positive during their two weeks of quaran-
tine. Korea is continuing to struggle with developing guidelines for the entry of foreigners.
Korea, which has a high degree of trade dependence, wants to set the good example of al-
lowing foreigners to enter the country, arguing that other countries should lift their travel
restrictions under certain requirements.

Overcoming COVID-19 is the biggest policy challenge right now, and attention should be
paid to the sustainability of the economy after overcoming the virus. Korea will deﬁnitely
have to address economic problems such as its increasing national debt and the lack of for-
eign currency liquidity in the future. Recognizing this, the Korean government passed the
Digital New Deal industrial policy in July, which plans to invest one-third of its annual
budget. Although it is intended to create new growth engines and jobs through ﬁnancial
expenditure, it is a pity that there is no intention among policymakers to reform labor-
related regulations, which have been massively criticized by global companies. A rigid
labor market and excessive regulations will prevent the reshoring of Korean companies
back home while further incentivizing companies to move abroad. In short, Korea has suc-
ceeded in combating COVID-19, but it has not been able to avoid the pitfalls of “ﬁnancial
addiction” and “large government.”

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