Good Practices and Innovations in Public Governance 2003-2011

2010 Category 2: Republic of Korea
Asia and the Pacific
Republic of Korea
2010 Category 2 — 2nd Place Winner
Hope-Plus and Ggum-Na-Rae Savings Accounts
Welfare Policy Bureau, Seoul Metropolitan Government
Description
2010 Category 2 - 2ND Place Winner
Description
A project to assist poor working families acquire savings and become more goaloriented,
as a means of lifting themselves out of poverty.
Summary
Seoul’s Hope-Plus and Ggum-Na-Rae Savings Account project is a private-public-NGO
partnership. It promotes self-reliance and asset building for the city’s working poor by
encouraging long-term savings with matched funding and the provision of integrated
social services, such as financial counselling and job placement. Since its inception in
2008, participation in the savings programme has grown from 2,000 families to 20,000,
with only a 2 percent dropout rate. Sixty-nine percent of the beneficiaries are single-parent
families and households with handicapped members. The Hope-Plus initiative has
spawned asset-building projects in four other major cities and provinces, and the Korean
government soon thereafter made plans to launch a similar programme nationwide.
The Problem
The recent global economic downturn, following the financial crisis and corporate
restructuring that swept the Republic of Korea in the 1990s, is putting working-class
people at a higher risk of falling into the “poor” category. Those already classified as
working poor face a more fundamental problem—being trapped in a fixed social
structure that makes it difficult to escape poverty. Even though they work hard, increasing
job losses and employment insecurity mean few opportunities for them to
advance. This has generated an even stronger sentiment of deprivation among the
poor, resulting in a new phenomenon: “hopeless poverty”.
The existing welfare policies in Korea have fallen short of addressing this newly emerging
poverty problem. In particular, the National Basic Livelihood Security (NBLS) programme,
which is the primary social safety net in Korea, has institutional loopholes, and
its allowances don’t adequately reflect actual cost of living. Furthermore, it grants welfare
benefits only to those citizens with incomes below the minimum subsistence level,
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