Laureate Sets Sights on Home FrontPresident Kim Dae-jung said yesterday he would take his nomination for the Nobel Prize as an occasion to concentrate more on the economy and other domestic issues. Recently he started convening and attending monthly meetings of economic ministers, but these problems continue to demand the president''s attention and handling. Under such circumstances, the president''s focus on the economy is to be widely applauded.
We believe we are either already in the middle of another economic crisis or on the verge of one. The main stock price index, threatening to dive back below 500, is at its lowest since the 1997 crisis. The financial market is in such bad shape that even companies affiliated with the largest conglomerates are finding it difficult to secure operating funds. With restructuring still going on, many salaried people fear they will lose their jobs. Wherever people meet, the economy is invariably the topic.
There are certainly plenty of unsavory issues abroad, from the Middle East conflict to the plummeting US stock market to the continued flight of capital from Asian markets. At home, there are the problems of how to deal with insolvent businesses and financial institutions and the financially shaky Hyundai Group. Like a minefield a pathway is hard to find and, if found, is even harder to stay on.
The president must first get back to basic principles. To start with, he should distinguish his job from the jobs of his ministers. For example, it is not a president''s job to comment that "domestic stock prices are undervalued by 30 percent" or that (regarding the sale of Daewoo Motors) "we were playing into the hands of the Ford Motor." He would do better to offer an economic agenda, lay down economic guidelines and appoint the right people to the right offices.
The president''s theme of "parallel development of market economy and democracy" has been an effective enough guideline. The problem has been with the appointment (and dismissal) of ministers. If the president realizes he has appointed a wrong person, he should replace that person right away. Otherwise, the president should leave ministers alone to do their jobs with confidence. He should abstain from talking about what his ministers are supposed to talk about.
There is increasing talk that excessive interference by the president''s office is making things more difficult. Once the president has appointed a minister, he must protect them from outside pressure. If restructuring is on the right track, it is the president''s job to ward off interest groups'' attempts to influence change.
These groups include business owners, regional politicians, business employees and small shareholders. In an age of "politicization of the economy," economic ministers cannot be expected to deal properly with all the related political and social problems.
The ministers, in turn, must distinguish their jobs from others''. In the area of the economy, the government''s job is, in principle, to provide against market failures. If a financial institution is in trouble, it is the government''s job to support it or to abolish it. It is not the government''s job to suggest that healthy banks should merge to further increase their already healthy condition.
The issue of the Hyundai Group should also be left to negotiations between Hyundai and its creditors. The government should intervene only as a last resort, when it is clear there is no room left to negotiate.
Short-sighted tactics like encouraging public and private pension funds to invest in the stock market, or running advertisements promising that "economy ministers give their word" look bad. In the long run, such tactics are very likely to lead to even more serious problems.