Concerted Efforts Needed To Revive Economy

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Concerted Efforts Needed To Revive Economy

President Kim Dae-jung has begun to pay closer attention to the economy. He has admitted that the Korean economy has hit a snag and emphasized that we should return to the attitude of the early days of the IMF bailouts when the nation collectively tightened its belt. He is also taking prompt measures; on the one hand, he has criticized and encouraged economic bureaucrats, and on the other, he has been listening to the opinions of former economic officials, including a former deputy prime minister for economic affairs. Prime Minister Lee Han-dong and Han Kwang-ok, chief of the presidential staff, have also arranged economic briefings for themselves. We cannot help but wonder why they are suddenly so keen to learn about the economy when the warnings of an impending economic crisis are nothing new. Yet it is fortunate that the president has finally grasped the reality of the situation, however belatedly.

It is no exaggeration to say that politics is the largest obstacle facing the Korean economy. Of course, as President Kim has said, some economic bureaucrats deserve criticism for painting an overly rosy picture of things. However, policymakers are largely to blame for plunging the economy, revived through the general public's sweat and sacrifices, into another crisis. The economic team has certainly flunked its grades when it comes to reform in the corporate and banking sectors. The financial sector, for instance, is a total mess even though 110 trillion won in public funds have been poured into it. In particular, the public has become angry about the inexperience and lack of negotiating acumen exhibited in the attempted sales of Daewoo Motor and Hanbo Steel, the prevalent mood of self-protection in every sector and moral hazard in public corporations. Economic bureaucrats need to reflect on their mistakes and make serious efforts to carry out reform.

But are economic bureaucrats the only ones to blame? The more fundamental responsibility lies with politics. In this respect the president himself cannot be free from criticism. The government prematurely declared that Korea had overcome the foreign exchange crisis, blinded by the semiconductor boom and the bubble caused by venture firms. This encouraged the public to loosen their belts. Furthermore, government officials ignored the continuous warnings coming both from home and abroad, and instead concentrated on North Korea projects requiring a tremendous amount of money. They thus neglected the domestic economy, failing to give it a chance to reform its economic structure, thereby helping to bring about today's crisis.

The actions of politicians have been pathetic. Obsessed with their own self-interest and party strategy, they have behaved like dogs fighting in the mud. As a result of this disruption the National Assembly has not even begun to deliberate next year's budget, which is in excess of 100 trillion won. Countless economic reform bills have been shelved for several months: the Financial Holding Company Act, National Pension Act, Minimum Wage Act and Tax Privilege Limit Act, to name just a few. When politics are in such shape, Korea's international credibility is bound to fall. If the South Korean economy fails, how can it possibly help North Korea?

The Korean economy is now at a crossroads. To tackle the numerous tasks that are necessary to save the economy from crisis, political circles, government, corporations and citizens should join forces in the realization that this is the last opportunity to climb out of the slump. It is essential for the
president to set an example and for politicians to make great efforts to transform themselves. A few months ago, President Kim criticized his economic team and emphasized that he would become more closely involved in taking care of economic matters, but not much has been changed since then. This time around let's hope his words do not end up being empty pledge.

by Moon Chang-geuk

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