[NOTEBOOK]When 'urgent' trumps 'important'

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[NOTEBOOK]When 'urgent' trumps 'important'

There are things that are important, and things that need to be done in a hurry regardless of the importance. It is human nature to do first the things that are pressing. But things just keep popping up out of nowhere, and while one takes care of business, ignoring the importance of order, it is no wonder that what is really important gets pushed back till the last minute.

Looking at recent policy on real estate, I think our beloved government has fallen into this trap of acting on sheer instinct.

Under the nose of the government, the prices of apartments in the Seoul Gangnam area have been on a constant rise for the last two years, and worried professionals had raised concerns even before that. Just as the situation seemed to get out of hand, the storming cavalry arrived in time to save the day, or so it appears. Done in haste, it hardly comes as a surprise that the proposed measures by the government seem a bit extreme.

Let me be blunt. The recent surge in the price of apartments is a problem the government inflicted on itself. After our economic crisis, the construction industry went into a slide and many firms faced bankruptcy. The government stepped in to the rescue. Taxes were lowered, companies were allowed to determine sales prices at will, and the right to purchase an apartment became a commodity to be sold. At the time the urgent need of getting the ailing economy on track was the top priority, and in the government's eyes boosting the real estate economy was an essential step to putting some life into the domestic economy. Every possible measure was thrown in to save troubled companies. It was like using an atomic bomb without thinking of the aftereffects.

In this case, it seems that our public servants have outdone themselves. It would have been a much better idea to let the market take care of the problem. Construction companies would have tried everything to stay afloat, and the rule of survival of the fittest would have provided a much better outcome.

True, housing prices are the cornerstone of an economy, but getting a grip on skyrocketing prices does not necessarily mean that everything goes, without thinking about the consequences.

The government blames the education problem as one main reason for the sharp rise in housing prices in Gangnam, so suddenly famous cram schools located there have become the object of scrutiny. We should realize that the roots of the problem lie much deeper. In our country, the general belief is that to get a prestigious job a diploma from a top school is a must, and to get that one needs to live where the best education is provided. If society's attitude does not change, we will forever battle this problem.

Teachers' wages have been on the low side for quite a while - in fact, since the liberation of our nation. Their prestige has been hammered, and we need to address this matter to provide a real solution.

I doubt that liberating greenbelt areas and converting them to housing sites for 100,000 families will solve the problems of a city of 10 million inhabitants. This is an urgent matter, but we should not repeat our mistakes of just seeing the single tree in the woods. In order to solve metropolitan problems we should not sacrifice something of which we have little, but should think of a way to make the provinces more attractive and to spread government functions over our country. It will take time for these measures to have any visual effect, but if we keep using patches for an obviously bigger wound the cycle will just make another turn and hurt us again.

Now that the Ministry of Construction and Transportation, the National Tax Service and the Ministry of Finance and Economy have rattled their swords, the Gangnam real estate market has gone to a temporary calm.

"For the time being, prices will be kept down but the price rally will return for the Gangnam area," one real estate broker said.

It is wise to deal with an important matter before it becomes urgent, and we have to get to the roots of our problems. Only then should a relentless effort be employed and a fundamental cure found. This should be a guiding principle for handling economic problems as well. As for our current problem, a true solution would be the normalization of our educational system and a rebirth of our provinces.


The writer is business news editor of the JoongAng Ilbo.

by Min Byong-kwan

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