The lights are going out in Seoul as the country drops its short-lived Covid exit strategy. Photo: Andrew Salmon / Asia Times

SEOUL – The party is over in South Korea, after the government announced Thursday that it is killing off its short-lived “Living with Covid” scheme and re-imposing social distancing.

The restrictions, imposed in a bid to curb runaway infections, serious cases and deaths, should set ring alarm bells ringing across the globe.

South Korea, the second country and first democracy to suffer a Covid outbreak, has been viewed as a poster child for effective containment. Testing, contact tracing, mask-wearing and vaccination policies have all been effectively implemented.

As a result, this nation of 51 million has suffered only 4,518 deaths from the novel coronavirus.

Thursday’s retrograde step by Seoul raises larger questions over when, how – or even if – prudent governments can navigate their societies back to pre-pandemic normalcy.

Turning back the clock

The new measures were announced by Prime Minister Kim Boo-kyum.

In a body blow to the year-end party season – normally a goldmine for the struggling food, beverage and after-hours sectors, now embarking upon their second Covid-era Christmas – gatherings are restricted to four people from six in Seoul, and eight nationwide. A 9pm curfew on these businesses is also being imposed.

Meanwhile, school class sizes are being cut in advance of the winter vacation and proof of vaccination is a requirement to enter many establishments.

The measures take effect from Saturday and provisionally run to January 2 – though it is far from clear if that date will mark a turning point.

They essentially nix South Korea’s nascent “Living with Covid” plan. That strategy was stillborn. It only took effect on November 1 after months of social distancing, including a 10pm curfew on eating and drinking spots, later raised to midnight.

Designed as a three-phase scheme under which total normalcy would return at the end of January, it never proceeded beyond Phase 1.

Though South Korea never enacted the kind of city-wide or nationwide lockdowns undertaken elsewhere, social distancing mandates have been onerous for the public and ruinous for businesses.

Once the curfew on late-evening eating and drinking was lifted, the pressure was released. The population of this immensely communal nation took advantage of the long-awaited ability to re-socialize throughout November.

That eagerness to get out and about, after hours, generated its own mini-crisis. A shortage of taxies in Seoul’s many nightlife zones left many revelers stranded until daybreak and the resumption of bus and subway services.

This tendency, combined with the effects of early-stage vaccinations waning, appears to have led to spiking caseloads, serious cases and deaths. Further fears were stoked when the first cases of the highly transmissible Omicron variant were detected in the country.

On Thursday, 7,622 new Covid-19 infections were reported, the Korea Disease Control and Prevention Agency (KDCA) said in a daily briefing, including 20 Omicron variant cases. The number of daily cases was just a short drop from the record daily high of 7,850 – recorded the day prior.

But Thursday’s numbers saw another grim milestone being passed, with 989 critically ill Covid patients – exceeding the previous record of 964, also set the day prior.

While caseloads in their 7,000s might not frighten Europeans or North Americans, for a nation that was seeing daily infections in the 2,000 range as recently as October, these numbers are hair-raising.

More so, given that – as of Thursday – 80.7% of the South Korean population was fully vaccinated. That number, it had been anticipated, would deliver the long-awaited Holy Grail of herd immunity.

With that likelihood apparently receding, the government is now strongly promoting booster jabs.

Moreover, South Korea has been widely praised for its by-the-book handling of the pandemic. The government has pushed widespread, low or no-cost testing and leveraged technology to trace infections.

The population has very largely cleaved to the policies of mask-wearing and social distancing without protest, and has not pushed back against invasive contact tracing.  

Economic impacts

Not only is there no clarity on when the country may resume its march to normalcy, but reversal of the Covid exit scheme also looks likely to impact the economy in Q4 2021 and Q1 2022.

South Korean exports, led by chips and other electronic components, have soared during the pandemic. With the world embarking upon “work at home, play at home” habits, huge demand was generated for data centers and devices.

On the strength of present data, exports this year are set to hit a record high. But domestically, and despite the passage of record budgets, business is looking far less robust.

A convergence of issues – massive household debt, high global commodity prices, inflation and depressed consumer spending amid the newly tightened social distancing – look set to pile yet more pressure upon an already reeling Mom ‘n Pop economy.

Up until midway through this year, only certain districts – such as Myong Dong, a downtown shopping precinct in Seoul that relied heavily on foreign tourists – were notably impacted, with storefronts looming empty as businesses closed down.

Now, the effects of two years of the pandemic are visible even in middle-class residential neighborhoods of the capital. It is impossible not to note the plethora of imdae (“for rent”) signs that increasingly occupy the windows of former shops, restaurants and cafes.

All this presents problems for policymakers, who have already okayed a record budget for 2022. The Bank of Korea raised its policy rate by a quarter percentage point to 1% in November in a move to curb both inflation and household debt.