[EDITORIALS]Ruffled by a far conflictThe start of a war between the United States and Iraq has added a new twist to the Korean economy. There are some positive signs, including falling international oil prices. But the prevailing view is that an early U.S. victory would not lead to an early recovery of the global economy. If the war drags on, the fallout could be tremendous.
Even if economic conditions improve abroad, this might not help Korea. After this Iraq War is over, Washington might turn its eyes to North Korea’s nuclear weapons program, escalating tensions on the Korean Peninsula. Even without this, there are plenty of bad factors that threaten the local economy, including the SK Global Co.’s accounting scandal, a possible downgrade of the country’s credit rating, surging defaults on household loans and slumping exports. We cannot expect the United States to help Korea, as it did during the 1997-1998 financial crisis.
We can say that the Korean economy faces a crisis, with all latent negative factors exposed with the start of the war in Iraq.
Some experts project that the local economy will suffer from growing financial instability and a steeper downturn after the war is over. We must all cope with the crisis with the strongest determination; the government and local companies should put into effect emergency strategies, and the public and workers should fully cooperative with those plans.
The government should ensure that there will be no disruptions in energy supplies and rises in consumer prices are checked. The government should hold investor-relations sessions for foreign investors as soon as the war ends. Through those road shows, the government should convince investors that it will focus on reviving the economy and change local business and labor policies to meet global standards.
Also important is how Korea will participate in the war’s aftermath. The government should study ways to help local firms gain access to post-war reconstruction projects in Iraq. To attain those goals, the government and the nation’s companies should cooperate.