[EDITORIALS]We must let businesses investKorea’s economy stands at a crossroads. The economic situation, both inside and outside the country, is unfavorable. Consumption and investment are not showing signs of recovery, and businessmen’s complaints of hardships are heard more often. Though export growth has kept economic indices normal, the economy is seriously polarized due to a lack of consumption and investment.
Under such circumstances, the Korean economy will be swayed by rising oil prices and increased interest rates on the heels of the China shock. Crude oil prices, having skyrocketed to their highest level in 14 years, will bring the Korean economy such burdens as price hikes and deterioration in profitability and the trade balance. The United States is expected to increase interest rates around June. If that happens, it is highly likely that much of the foreign capital invested in Korea will flow to the United States in pursuit of high interest rates. In Korea, however, it will be difficult to raise interest rates with domestic consumption at a low point. The China shock will linger as a condition that will drag Korea’s economy down.
As overseas economic variables sour, with domestic business already in the doldrums, it is hard not to worry that the economy could slip into the mire of nonrecovery if things keep going this way. What is even more worrisome, under the circumstances, is that we constantly hear businessmen complain that they are losing the will to run businesses.
We can find a clue to the solution in business investment. We must create jobs and revive consumption by opening the way for businesses to invest actively. In this way, we must also find solutions to the problems of credit delinquents and youth unemployment. To make this possible, we must put all our effort into creating a business-friendly environment.
It is deplorable that the government fails to grasp this situation when the economy is in such difficulty both at home and abroad. Regarding such issues as regulation of business management and unions’ demand for participation in management, differing views are being expressed within the government. If things continue this way, the Korean economy will fall into a state of nonrecovery. There is not much time left for us.