중앙데일리

[FORUM]Be magnanimous, and inclusive

July 20,2003
Seventy-two is a funny number. It can be divided evenly by seven of the nine natural numbers between one and nine. One could say it is a number of magnanimity. This number shows its true colors best when used to calculate how many years it would take to double one’s income or salary. If your income increases by 6 percent annually, it would double in 12 (72 divided by 6) years. If it increases by 8 percent, your salary would double in 8 (72 divided by 9) years.
Eight years ago, when we first achieved the $10,000-mark in our per-capita income, many people felt not only a sense of achievement and hope but nervousness as well. At the time, as an attempt to find evidence of this nervousness and hope, I collected some data and did some simple calculation. First, I wanted to know if there was indeed evidence for the public belief about an “enchanted wall of $10,000.”This was the belief that there is a halt in economic growth once a country reaches the $10,000-mark in average income. I didn’t have to look far. The answer came from our neighbors Japan and Taiwan, who were a little ahead of us. Japan’s income per person reached $10,000 (in 1995 dollars) in 1973. But the next year, its economic growth rate crashed due to the oil shock. Taiwan reached the coveted $10,000 mark in 1991, only to see its growth rate fall markedly afterwards.
What made Koreans uneasy eight years ago was the fear that our structural problem of being a high-cost, low-efficiency economy could grow worse. This was also the time when many distinguished economists in the world, including Paul Krugman, had forecast that the high growth rates of Asian economies were soon to end.
The second thing I calculated, perhaps in wishful hope, was when we could reach the $20,000-mark if we solved this structural problem through appropriate measures. If, assuming an annual growth of 6 percent and 3 to 4 percent price rise under a stable exchange rate, I calculated that we could reach the $20,000-mark in per-capita income eight years later, in 2003.
At this point, when according to my calculations we should have reached the $20,000-mark, our government has announced that this is our long-term goal and that it was planning the details of our strategy to achieve this goal. That translated into numbers, means another 7 to 10 years of waiting for the $20,000 mark of our dreams.
What must the government do if it is not to make the people go around in circles? If we take our lessons from our experience of the past eight years, the most important one would be the will and leadership of the supreme commander. Presidents Kim Young-sam and Kim Dae-jung tried with all their determination to solve our economic problems, but at the end of their terms they were bogged down by corruption scandals involving several of their family members and close acquaintances. Their inability to attend to any other matters was one of the fundamental reasons that our economy took such a steep dive. This is a lesson that President Roh and his family and friends should always keep in mind.
The next thing would be to redouble our efforts to create an atmosphere of reconciliation and peace within South Korean society instead of heightening the strife and the conflict. Only when we unite our forces will we be able to overcome the formidable obstacles ahead of us. In a situation where the giant economy of China is pursuing us with fierce speed, we are fighting among ourselves, divided into north and south and east and west. The Roh government should heed the criticism that it is operating a narrow-sighted government by trying to categorize its enemies and friends through the so-called “code,” or set of the president’s personal beliefs. Take it from the number 72. Have some more magnanimity.
There could be several detailed strategies for doubling our income. But instead of putting out an array of policies in the show windows, the government should concentrate on two of the most important tasks, the reform of labor-management relations and the deregulation of the business sector. These are the two main reasons that our domestic businesses are fleeing the country and foreign investors are wary of investing here.
If the government could solve only even these two problems, it would have found the solution not only to our economic growth and employment problems but to the question of the societal distribution of wealth as well.

* The writer is the director of the JoongAng Ilbo Economic Research Institute.


by Ro Sung-tae


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