[FORUM]Incompetence is breeding failure

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[FORUM]Incompetence is breeding failure

Many have blamed the government's personnel policy as the source of the state's disarray, corrupted politics and the negative public opinion. The recent cabinet reshuffle has been discounted but even worse the government has been disparaged for selecting its personnel based on personal ties and regionalism rather than on ability. This personnel policy within government has led to the point where the president's sons are involved in corruption.

The personnel reshuffling of the government based on favoritism does not end with the government administration but expands to the political realm. The National Assembly has repeatedly fell into periods of idleness. Even when it is open, the public welfare is the last issue discussed.

However, despite the instability of the government and politics, the economy is growing at an impressive rate. In the first quarter, the gross domestic product grew 5.7 percent, and the Bank of Korea predicts the growth rate will reach 6.8 percent in the second half of the year.

How can the economy develop with politics in such a mess? Can the economy and government administration operate soundly even though they are run by people with less than adequate ability? And how long will the economic growth continue?

First of all, when reviewing the connection between the economy and politics for the short term, it is hard to reach a conclusion. The economy could struggle even when politics is stable. Therefore, in the short-term, the economy and politics could operate separately without influencing each other. However, taking a longer view, without the stability of politics, it would be impossible for the economy to grow.

The best example is Japan. The Japanese are well known throughout the world for their hard work and financial savings. They have supported the Japanese government's policies. However, Japanese politics, which has not advanced from the standards of an underdeveloped nation, has helped stagnate the Japanese economy for more than a decade.

A similar connection could be made for the relation between an economy and the ability of high ranking officials. The performance result of a first-rate official and that of a second- or third-rate official might look similar. But the difference widens with time.

Korea's economy has been improving, but it is only the macroeconomic index and the growth rate that appear to be fine. Companies and industries are being criticized for not improving to acquire a competitive edge. Consumer expenditure, construction and the service industry have led economic growth.

If investment and exports do not continue to flourish the economy's favorable growth may be short lived. The expansion of consumer spending and construction is a result of the government's stimulus package that Seoul pushed till late last year.

The overflow of cash in the market has pushed interest rates to new lows. Therefore, household loans have increased, which has encouraged consumers to spend even more and invest in the stock market and real estate. This in return has promoted consumer spending again and boosted the construction industry.

The outlook for next year's economy is gloomy. The debt from households and the government will be a burden. And in order to subsidize the burden the spending of households and government will have to be reduced.

There are other problems in and outside Korea, including the unstable U.S. economy, steep rise in the value of the won, the pressure of rising consumer prices and interest rate and labor disputes. If political instability continues, the economy can go in no other directio but down.

In the long run politics and the economy are inseparable because they have an impact on each other. Keeping this in mind, Koreans must choose wisely in the coming election. A candidate with leadership ability should be elected. Officials should be selected for their abilities and not on the basis of region or favoritism.

This in return would bring stability to the economy and national politics.


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

by Ro Sung-tae

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