Incheon, South Korea – A few days before the end of 2021, Shin uploaded a video to YouTube. The owner of a bar in the city of Uijeongbu, on the northern edge of Seoul, had a brave idea for New Year’s Eve.
“On this December 31st, I will be broadcasting my bar live and doing business as usual from 9pm to 5am,” he said in the video.
“Which means I’m going to face the government restriction.”
In mid-December, the South Korean government reintroduced a business check-out rule as COVID-19 cases rose to record highs across the country. Restaurants and bars must close after 21:00. Offenders face fines or the suspension of their business.
Although South Korea avoided the extensive business closures and stay-at-home orders seen in other countries during the pandemic, it imposed restrictions on business hours. small businesses hit hard.
Shin, who asked to be identified only on his surname, was not the first to announce his intention to defy the curfew rule.
A cafe chain sparked controversy when it announced days earlier that it would break the rules, citing the financial hardship caused by a previous months-long curfew imposed in July.
Shin told Al Jazeera he felt inspired when he heard the news.
“What they did set my heart on fire,” he said. “And I wanted to do the same for other business owners.”
Shin, who co-owns about a dozen hospitality spots in Uijeongbu and the nearby coastal city of Incheon, said his businesses have lost about $ 1.3 billion ($ 1.1 million) in losses over the past two years.
“I, for one, owe about 600 million in debt, with only what was incurred by the restriction alone,” he said.
Bars and restaurants are not the only businesses that have suffered. Indoor sports facilities such as the Oh Sung-young running gym in Pocheon, a city northeast of Seoul, were one of the biggest losers of the government’s pandemic policy.
“I was expecting at least a handful of new members, but none so far,” Oh told Al Jazeera, referring to business in the new year. “Only two or three membership extensions.”
Gymnasiums are among the few businesses ordered to suspend their operations temporarily completely, with an initial closure order in March 2020, followed by two more rounds of closures.
The return of the curfew rule, which also requires gyms to close at 9pm, has led many of Oh’s customers to suspend or cancel their membership, which has cut their revenue by half.
“Adults with a regular job usually go to a gym after work after 8pm,” Oh said. “They simply do not have time to wash themselves after training.”
In general, South Korea’s economy has withstood the pandemic well compared to many of its peers, while authorities have reported fewer than 6,000 deaths.
“Among the large developed economies, [ours] recovered to the pre-COVID level at the fastest pace, “President Moon Jae-in said in a speech to the National Assembly in October. “The average growth rate of the past two years was higher [than the G7 nations]. ”
However, this growth was far from uniform across industries. While conglomerates such as Samsung and Hyundai achieved record exports, the income of many smaller businesses declined.
While South Korea’s top 100 companies saw profits fall by 2.5 percent in 2020 compared to the previous year, small business profits fell by 43 percent, according to the National Statistics Office. The arts, sports and leisure sectors suffered the most, with profits falling 85.2 per cent compared to the previous year.
That unequal picture runs the risk of holding back the broader economy.
“The polarization in the labor market and household income reduce consumption,” Lee Seung-hun of KB Research said in a report. “Weak consumption will hamper the growth of the Korean economy.”
Noh Min-sun, a research fellow at the Korea Small Business Institute, said in a report that the government may be tempted to tighten fiscal policy out of concern over inflation despite the effects of the latest restrictions.
“The government must ensure that the small businesses that cooperated during the pandemic measures will receive sufficient compensation,” Noh said.
Many business owners complain that the government’s support measures have not gone nearly far enough.
“My businesses have received compensation of up to 20 million won ($ 16,700) each,” Shin said. “But what help can it give me if one venue costs 12 million a month in rent?”
Oh said he has won about $ 10 million in compensation over the past two years, barely enough to cover his monthly operating expenses.
According to government guidelines, a business that lost 14 million won in revenue last year compared to 2019 is entitled to less than 4 million won as compensation.
Critics say the government has been reluctant to provide as generous support as other countries.
While economies such as Germany and Japan deployed support equivalent to more than 15 percent of gross domestic product (GDP), South Korea’s spending was 6.4 percent of GDP, according to International Monetary Fund statistics.
Swelling household debt was one of the consequences. Last month, the Bank of Korea noted that the private sector, especially households, led to a rapid expansion of debt during the pandemic, unlike in other major economies where government spending led the charges.
After peaking at nearly 8,000 cases in mid-December, South Korea’s latest wave appears to be largely under control.
Officials say, however, that it remains to be seen whether restrictions will be extended when the current round ends on January 16, even though the country’s double vaccination rate of 82 percent is the highest in the world.
Meanwhile, business owners’ sense of desperation is growing.
Despite increasing debt, Oh applied for another loan.
“There was nothing I could do but keep piling up debt, because if I quit now, I would have nowhere else to go,” he said. “I just hope the pandemic will be over soon.”
Anger also increases. In recent weeks, hundreds of small business owners in Seoul have rallied to protest the restrictions.
Shin finally did not stage his little rebellion on New Year’s Eve, but plans to make his voice heard soon – only this time he will not be alone.
“I got a lot of calls from different business owners’ organizations,” he said. “One of them asked me not to do it this time. “They said they were coordinating their actions and asked me to join them when the time was right.”