[EDITORIALS]Reform needs stability firstThe Roh Moo-hyun administration’s first economic team exudes a sense of general stability. The formation of the team is less experimental than others named by Mr. Roh. Apparently, he was aware that the most urgent task of the new administration at this point is to stabilize the economy.
The foreign and domestic situation is growing increasingly gloomy. The prolonged geopolitical crises involving Iraq and North Korea have sent international oil prices soaring, and the global economy is slumping rapidly. Korea’s current account balance is showing signs of swinging to a deficit, while businesses are cutting capital spending. The unemployment rate is rising and prices are surging, leaving low-income people jittery. There is also a growing sense of fear that Korea’s economic growth potential may nose-dive.
Seoul’s new economic policymakers should create an environment in which foreign and local businesses can feel safe about making new investments. How can the people feel confident about the economy if factories close and fewer jobs are available? The new administration may be tempted to resort to economy-boosting measures before next year’s legislative elections. It is the economic team’s duty to make sure that the economy is not swayed by political considerations.
Economic ministers should cooperate closely with the Office of the Senior Secretary for Policy Planning in the Blue House. The policy planning office has become more powerful and very reform-minded, and policy friction could be the result.
Harmony among economic ministers is also important. The labor and agriculture ministers should be careful not to focus too much on distribution of wealth.
If prices rise further, job losses increase and the financial system become unstable, the government cannot implement reforms properly in that climate. Therefore, the new economic team should do its best to revive the economy by removing economic uncertainties. If the economy is revived, the government will be able to push its reform agendas more aggressively.