[EDITORIALS]An economic emergencyThe situation of the Korean economy can only be described as total crisis. Considering that local banks are having difficulties borrowing overseas, the situation is too serious to be downplayed. The complex reasons that have combined with noneconomic shocks and psychological panic make it difficult to figure out where to begin to fix the problems. How can we overcome this crisis?
Most urgently, the government should soothe jittery sentiment. It should put its priority on reviving the slumping economy and should provide its full support for healthy corporate activities. It should hold public-relations sessions for domestic and foreign investors and strengthen cooperation with international financial institutions.
Noneconomic factors have such a strong impact on the Korean economy that some experts blame President Roh Moo-hyun and public prosecutors for aggravating the situation. The president should remember that his remarks can affect financial markets and the economy. In order to ease concerns over North Korea, the government should show the market that the decades-old South Korea-U.S. alliance remains strong. It should strengthen this cooperative relationship.
The local economy is not robust enough to endure what the president calls “temporary difficulties.” While prosecutors should crack down on illegal corporate activities, they should not forget that the impact of their investigations on the economy may be far bigger than they imagine, as is the case with SK Global Co.’s accounting irregularities.
Mr. Roh’s economic team should design comprehensive and radical measures to reassure investors, rather than resort to makeshift plans. Individuals and companies should refrain from stacking up U.S. dollars; panic will worsen the situation. In addition, the government should improve the market system to regain investor confidence in local corporations, while the business community should fix its tainted image.
The situation is an emergency. We must cope with it speedily, mobilizing all economic and noneconomic resources. As the Korean people lined up to donate their gold rings in 1997 to help save the nation, all members of society should unite this time, too.