[NOTEBOOK]Distrust and political logicA few days ago, I had a drink with a representative of the Uri Party. He was seriously concerned about the economic situation. He worried that there were neither signs of recovery nor political measures available. “Exports are no problem. But spending and investment do not follow. Due to the unrestricted issuance of credit cards during the past administration, insolvent credit card holders exceed 3.8 million people, so there is no particular thing to do right now. Bad banks will be of no use if they can’t provide jobs. The reduction in interest rates does not work, and there is no room for increasing fiscal investment. What we can turn to now is only investment from large companies.”
In an atmosphere where those who talk of economic crisis are regarded as anti-reform forces, his remarks were refreshing. I welcomed his perception, which was not different from the mood in the market. He was said to share the “code” with President Roh Moo-hyun. He meets with President Roh at any time. So, unlike the official announcements, the government did not seem to be unaware of the seriousness of the current situation.
But his next remarks were shocking. “But large companies do not invest. Not investing with more retained earnings than ever amounts to sabotage against the administration,” he said. He even talked about a conspiracy for regime change. What in the world is he talking about? Who are these businessmen? Aren’t they those who pack and run even to the ends of the earth if only they can make money? Don’t they invest in the United States or Europe only because they can get special favors in those countries?
What is worrisome indeed is that the political leadership and large companies cannot trust each other. The politicians think that large companies are putting pressure on the government to make it give up its reforms, even giving up opportunities to earn money. Large businesses are afraid that President Roh’s economic policy may undermine their profits. “We cannot help accepting institutional reform that befits global standards. But foreign countries do not shackle large companies. In these uncertain conditions, how can we invest?” These words from a member of an economic research institute of a large company provide a clue to the problem.
Mr. Roh has strongly advocated “reform” since he took office. He says it is to make the market transparent, but the business circles complain that it is, in fact, to restrict large companies and free the labor unions. Some talk about excessive politics. The president put all his energy into politics to the point that he staked his presidency on the legislative elections. And some think that his management of the economy is also ruled by political logic. Chung Un-chan, the president of Seoul National University, also diagnosed the cause of the shrunken investment as uncertainty in the market.
The Assemblyman I met praised highly Samsung’s initial investments in electronics. He repeated the word “patriot” to describe the company’s contribution to building a semiconductor industry that supports the Korean economy by investing with a vision for the future. He expected that businesses would achieve the same results from the “10 largest growth industries” that the administration is pursuing. He added that if they did not have “a certain intention,” large companies would not have ignored the government as they have.
When the situation is so serious, both sides should have made every effort to resolve the misunderstandings. But they do not even look at each other. They just go their own ways. The deputy prime minister, who was pushed back by political logic as soon as he took office, lost his voice. The presidential economic aides, who should deliver the president’s message, do not make a move. Even leaders of the ruling party express their anger at the absence of the role of the commanders of economic affairs.
The administration’s effort to break the collusion betwen politics and business had considerable results. But we cannot entirely praise its achievements. The government and the business community are building higher walls of distrust, going beyond the rupture of their relations. By inviting business leaders and letting them to take part in a staged dialogue, the government can never restore confidence. It should have frank dialogue with the business community to find solutions.
* The writer is a deputy political news editor of the JoongAng Ibo.
by Kim Jin-Kook