[EDITORIALS]Revitalizing Korea’s economy

While the world economy is showing signs of recovery, the Korean economy is still lost in the fog. Our economy has lost so much vitality because of labor-management disputes, as well as a lukewarm restructuring program.
The favorable trend in the world economy, led by the United States, has become clearer recently. The United States posted 7.2 percent growth in the third quarter, the highest rate in 19 years. Japan also did much better than expected, showing 0.6 percent growth in the third quarter, continuing a trend of almost two years. Europe also is growing for the first time in quite a while.
It’s not that the domestic economy isn’t showing any signs of improvement. Exports exceeded $19 billion last month, a record amount, and a trade surplus of $10 billion is expected for this year. But the domestic demand index remains stagnant, reflecting high consumer debt. In the past, when exports rose, that would also activate domestic consumption after an interval of six months or a year, which helped the economy turn around. Now, however, several negative developments are weakening the correlation between an increase in exports and a revival of the domestic market.
An even bigger problem is that the business environment is working against an economic recovery. Such developments as political infighting, investigations of presidential election campaign funds and labor strikes are affecting the business sector. The government is trying to stir optimism, saying that the economy has now hit bottom and that it will recover next year. But when the business sector does not dare to plan ahead for next year’s operations, this story of optimism rings hollow.
What is more important than clumsy optimism is to revive the economy. To do so, we need to swiftly wrap up the investigation of political funds, not to mention ending labor-management conflict, in order to seek economic stability. This is the only shortcut to promote capital spending and to attract more foreign capital, so as to revitalize the economy.