[NOTEBOOK]Where are our politics heading?

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[NOTEBOOK]Where are our politics heading?

I got a call from the president of a large corporation a few days ago.

"I can't figure out what is really going on in politics," he said. "There is this meeting where several business executives get together. I would like to invite a political reporter to the meeting. Can you introduce one to us?"

Whenever I meet members of the business community these days, our conversation always flows into politics. It usually starts with a complaint that they were overwhelmed by the number of political scandals that are too complicated for them to grasp, but wanted to know who would be the next president.

Those business leaders' interest in politics goes beyond personal curiosity. Their businesses are directly linked to politics. In fact, depending on the attitude of the next administration toward business regulation, corporations may have to devise new strategies.

Business leaders say they now feel stuck because nothing seems predictable ?not just the results of elections, but even the political process leading up to elections. The most unwelcome days for businessmen are foggy days, not rainy ones. They say if good days are foreseeable, that would be best, but if bad days are expected, companies can at least gird themselves for such conditions by, for example, downsizing in advance. But if the future is obscure, who knows what to do?

In Korea, domestic demand is so strong that some analysts question whether it can be sustained. Exports also have increased for the first time in 13 months. Despite these auspicious signs, investment is stagnant. That is a serious problem, because there is no future without investment.

The economy has bounced back but interests rates are still low. Against this background, it seems to me that the biggest reason keeping business away from investments is the uncertainty in the air. If companies invest in a new factory, it takes at least a year or two before products begin coming out the door of the new facility. Companies are hesitant these days because the shape of the world a year from now is shrouded in fog.

I think the economy is going to be swayed by politics again this year. For one thing, the government has put off policies that economists have clamored for for a long time. Experts have insisted that the government should raise interest rates and tighten its purse strings to calm the real estate market and inflation. The government has said it is too early to take such measures because exports and investment have not yet recovered. Cynics question whether the government is simply balking at implementing policies that cause them to lose votes.

Before his resignation to run for the governor of Gyeonggi province, Deputy Prime Minister Jin Nyum visited Moody's, a credit rating company in the United States, and induced the usually conservative company to lift Korea's credit rating by two notches in one fell swoop. Mr. Jin at the time reportedly stressed that the economy would not be bogged down by politics despite two elections this year. But Mr. Jin, a career administrator, jumped into politics himself despite his pledge to execute economic policies in a politically neutral way. I wonder what Moody's would think about that.

The office of the senior presidential secretary for policy planning, which is in charge of events related to the 2002 World Cup soccer tournament, is at a loss these days. Because local elections are coming in June, governors, mayors, or heads of political districts often cannot attend World Cup-related events because it could be considered illegal pre-election campaigning. The office wanted to postpone the elections but failed because of differences of opinion between the two major political parties.

In order not to make 2002 a lost year in economic terms, political influence over the economy should be minimized. The president should be at the forefront of such efforts.

President Kim Dae-jung reportedly has pared his schedule and decreased the time he devotes to briefings by economic ministers. He is probably worried about his recent illness and the entanglement of his three sons in scandals. But he should remember that he pledged to focus on the economy when he resigned as his political party's head. I hope he keeps that promise.


The writer is business news editor of the JoongAng Ilbo.

by Min Byong-kwan

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