[VIEWPOINT]Hamstrung economic policy

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[VIEWPOINT]Hamstrung economic policy

“I wonder if Korea can have a true market economy these days,” said Deputy Prime Minister Lee Hun-jai, the head of economic affairs in the “participatory government.”
Announcing his economic policy direction when President Roh Moo-hyun resumed office after the impeachment situation and the legislative elections were over, the president said he would pursue reform and change based on the stability of people’s livelihoods and be more faithful to the principles of a market economy. But then the commander in chief of economic policy is raising questions and asking some people not to “hold back the ankles of policy implementation.”
Mr. Lee cited the disclosure of apartment building costs and the blind trusts for public officials’ assets as cases of anti-market policies, and called the younger leaders of the ruling party a drag on policy implementation. Of course, the officials themsleves deny that these are anti-market policies.
In fact, these conflicts and confusion were anticipated. Many changes in policy were expected when the balance of power changed with the governing party’s surge to a majority in the last legislative elections. Because the participatory government’s liberal policy line gained support from the people in the legislative elections, the governing party is now able to implement its policies that it could not promote because the legislature, which was controlled by the opposition, vetoed them.
After the elections, Mr. Lee said, “I will carry out growth-centered policies.” We wondered if he could really do so, and in fact he spoke out only three months later to say that his keynote policies had been held in check and that even his belief in a market economy had become shaky.
I don’t want to say that the present situation that frustrates Mr. Lee is necessarily bad. The participatory government may pursue its party line with a determined attitude that it will again seek people’s judgement in the next presidential and legislative elections. Unlike Mr. Lee’s argument, the disclosure of apartment building costs and the blind trust system could be market economy oriented policies that prevent real estate speculation and clean up corruption. But when the person in charge of economic policy bets his job by voicing the opinion that the policy direction is opposed to the market economy, the best policy would probably be to listen to him and correct the mistakes.
Many people are paying attention to the administration’s reforms and renovation. Watching the situation, businesses with sufficient funds delay investments and households with financial leeway put off spending. They have come to question, due to recent incidents, the assertion that the market economy is the keynote of the Roh administration and the Uri Party. Furthermore, people who found it difficult to believe the words of the administration and Uri Party about the primacy of the market economy before Mr. Lee’s remark seem to have had their doubts confirmed.
After the impeachment and the legislative elections, the people expected that the government would take care of the neglected economic issues, improve the people’s livelihood, strive for national unity and rescue the economy. But even after President Roh resumed office, the division between pro-reform and anti-reform forces became worse, and coexistence and tolerance are nowhere to be seen. True reform aims at establishing a market economy. If the supporters of a market economy are criticized as anti-reform forces, reform will turn into something to change the market artificially, not to establish a market.
As slow investment and spending continue, we might fall into Japan-style stagnation unless we solve the problems of our economic structure. In this situation, the people in charge of state affairs should not protest that they are also working for a market economy or doubt those who question their policies, but reflect on whether their policies really follow the principles of a market economy.
When Ronald Reagan, who emphasized the market, was elected U.S. president, his aides attended a celebration party wearing ties with the profile of Adam Smith. Now, when the keynote of market economy held by the participatory government is questioned, shouldn’t our policy makers wear ties symbolizing the market economy? And shouldn’t they ask loudly, “Is Korea truly pursuing a market economy?”

* The writer is a professor of economics at Hongik University. Translation by the JoongAng Daily staff.


by Park Won-am
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