[EDITORIALS]Plan for worst, do the bestThe domestic and overseas economy is rattled by the growing possibility that the United States-led war in Iraq will last longer than expected. International oil prices have rebounded, while equity prices have turned sharply lower. The conflict in the Middle East is taking its toll on the Korean economy, as it has already lost $57 million worth of export opportunities, and domestic consumption and corporate investment are shrinking further.
It is unclear how the war in Iraq will unfold and how it will affect the Korean economy. In addition, there is nothing Korea can do about the war. Even if the conflict ends quickly, we cannot expect a swift rebound in the local economy because of lingering concerns over North Korea’s nuclear weapons.
Then, the best option that Korea can take is to draw up measures to cope with every scenario possible to enhance the country’s competitiveness, rather than being affected by a short-term development of the war. For the short term, the Korean government should come up with ways to help local trading companies, which have faced serious difficulties such as dropping exports and surging shipping fares. In addition, local financial institutions should loosen their financial spigots to prevent healthy companies from going under due to temporary cash shortages.
The government should provide financial and psychological support for domestic businesses to ease jittery feelings. The country’s chief tax official said Monday that the National Tax Service would postpone corporate tax investigations for the time being. Such a remark would greatly help abate the market’s anxiety. The government has made the right decision to hold investor-relations roadshows for foreign investors in major world markets. The government should also improve ties with the United States to defend our economic interests, not to mention security. We should discard the unfounded expectation that a quick end to the war in Iraq will result in an improved local economy. The government should draw up emergency measures to instill new life into the sagging economy, based on long-term perspectives.