[EDITORIALS]An economic hostage

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[EDITORIALS]An economic hostage

The bad economic news from home and abroad is amplifying the Korean economy's uncertainty. The sluggish U.S. economy, which triggered general indecision, has now compounded with the domestic economy's weaknesses to swiftly bring a sense of instability to the nation. We face multiple concerns of a credit bubble, dulling exports and looming war cries between the United States and Iraq. The main exchange, the Kospi, has fallen below the 600-level, and who knows where the bottom will be.

Inevitably, if we fail to surmount this series of shocks, our economy will really struggle next year. Inflation will leap, and the trade surplus in place since the 1997 financial crisis is expected to make a turnaround. The nation's conglomerates have announced that they will tighten their belts in the coming year.

The economic problems deepen; but the problem-solving capability of the government seems to have hit a wall. Politicians have their goals set for a victory in the presidential elections; and government officials seem reluctant to tackle the mounting issues. Given that the current economic instability comes largely from external factors, we cannot fail to admit that policymakers face a limited choice of tools they can employ. However, that does not give permission for the policymakers to stand by silently. Concerns over a hard landing have poured in from various sectors. To forestall the Korean economy from falling on its face, the government should do everything within its power to curtail real estate speculation and draft countermeasures for a probable slide in the economy.

Sadly, the government seems far from fulfilling these needs. On Thursday, the government put out a set of measures aimed to upgrade the lives of lower-income Koreans, an action clearly done for election purposes. The Monetary Policy Committee at the Bank of Korea again kept the call rate at its current level. The divergence over the call rate between the government and the central bank tells of problems of fine-tuning between policymakers over the interbank lending rate. Administrations are usually held prisoner to lame ducks -- not to the economy.
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