[EDITORIALS]Gloom and doom but hopeThe domestic economy has not found a way out of its troubles. The 4 million blacklisted delinquent debtors, the high youth unemployment rate, sluggish domestic consumption, the conflict between labor and management and heavy credit card debts are already too much for the economy. Now new problems ―instability in the exchange rate and a hike in raw material prices ― have emerged to add to the burdens.
Domestic consumption remains sluggish, despite numerous measures to boost it. Unlike some government officials’ view that the domestic economy has begun to recover, it has not. Only the word “difficult” is echoing in markets, department stores, restaurants and taxis. Now some raw materials are in short supply, and prices are rising. Some basic products, such as steel sheets, have doubled in price. Some factories have stopped operating because of supply shortages. Oil prices are rising, and consumer prices will also, before much longer.
Export performance will be damaged, and soaring prices will cut into domestic consumption. Many smaller companies, hit by supply problems and financial woes, are near death.
The new deputy prime minister, Lee Hun-jai, said yesterday, “With the current conditions, it will be difficult for this year’s economic growth to reach 5 percent.” Earlier, the government had forecast that this year’s economic growth would be between 5 and 6 percent. So. Mr. Lee’s remark indicates that conditions have deteriorated. How can the domestic economy emerge from these difficulties?
In such situations, government leadership is necessary. Fortunately, the market’s view of the new economic team is positive, and business leaders are working to help the recovery. This is an effort that the administration’s economic team should assist. The team should keep its policies consistent and should not take pork-barrel measures to seek votes in the National Assembly election in April. Politicians also should aid the administration in such efforts.
Until now, measures to boost the domestic consumption have not been effective. That is because the outgoing economic team stayed huddled in its offices. In order not to repeat such errors, the new economic team should get out and meet the businessmen who are on the front lines.