Background

The South Korean economy has been on the ascent for decades. Its solid fundamentals – a high-tech manufacturing base, record of innovation, and stable business-friendly governance – have helped guide it through the great recession without so much as missing a beat.

But the situation has reversed itself lately, in part because of the recent MERS outbreak that is hurting retail consumer spending. This has prompted the Park government to unveil a stimulus package meant to provide relief to low-income earners, farmers who are suffering from a record drought, and businesses that have been hit by flagging tourism following the MERS outbreak. Over 120,000 tourists have cancelled trips to South Korea already, and the number is sure to increase unless the outbreak is quickly contained.