The Presidential Committee on Policy Planning has decided to include 'activating the social solidarity economy' as a national policy task. Notably, the previous Moon Jae-in administration also aimed to establish social economy as a national agenda but failed to enact relevant laws, and during the Yoon Suk-yeol administration, the social economy has been somewhat repressed. Attention is focused on whether the Lee Jae-myung government can revive it.
The social economy refers to economic activities that aim for public benefit, such as contributing to the community and providing jobs for vulnerable groups, while also generating revenue. It manifests in various forms such as social enterprises, community businesses, self-sustaining enterprises, and cooperatives.
The Presidential Committee on Policy Planning formed a task force (TF) last month to develop measures for alleviating polarization, creating jobs, and revitalizing the local economy through the social economy. The goal is to strengthen the self-sustainability of social economy organizations.
The committee has replaced the term 'social economy' with 'social solidarity economy,' which was adopted in the 2023 UN General Assembly resolution. Additionally, they discussed plans to scale up social solidarity economy startups, expand funding and guarantees for social solidarity economy corporations, enhance the supply of 'social dwellings' provided for the economically weak by social solidarity economy entities, and increase the waiver of usage fees on state-owned property for social economy organizations.
The committee and the ruling party have also begun the establishment of the 'Social Solidarity Economy Basic Law.' Currently, the concept of social solidarity economy is not clearly defined, leading to the separate operation of support for social enterprises and cooperatives by different ministries. Should the proposed law be enacted, it will create a common legal foundation encompassing social solidarity economy organizations and finance policies and systems, including the activation of social finance.
However, it remains uncertain whether the proposed law will pass smoothly in the 22nd National Assembly. The basic law has been persistently proposed since the 19th National Assembly, but has been automatically discarded due to failures to negotiate specific details. Concerns remain that excessive government market intervention, tax benefits, and subsidies could hinder fair competition with private corporations and place a burden on budgets and tax revenues.
Attention is being drawn to whether the Lee Jae-myung government can revitalize the social economy, which had been depressed during the Yoon Suk-yeol administration. Previously, the position overseeing social economy policies during the Moon Jae-in administration was eliminated under President Yoon, and the Ministry of Economy and Finance integrated the 'Social Economy Division' and 'Cooperative Division,' changing it to the 'Sustainable Economy Division.'
A government official noted, 'During the Moon Jae-in administration, policies regarding the social solidarity economy were actively pursued as part of national tasks; however, the driving force weakened during the Yoon Suk-yeol administration.' He added, 'The new government appears to be rapidly promoting policies regarding the social solidarity economy.'