[EDITORIALS]Money transfers and the richThe government will check illegal overseas transfers of domestic assets. The government has judged that the rapid increase in the amount of assets transferred overseas is not normal. In the first five months this year, a total of $8.07 billion was transferred overseas for the purposes of travel, study and emigration. The amount of money transferred for personal purposes was 10 trillion won ($8.6 billion).
What is even more problematic is that the amount smuggled out, under the disguise of trade by paying Korean won at home in return for payment in U.S. dollars overseas, increases more rapidly. During the first half of this year, illegal foreign exchange transactions uncovered amounted to 1.3 trillion won. It was five times more than that in the same period last year. And the amount sent overseas through payment of won in Seoul in return for payment in U.S. dollars overseas has increased 10 times more than that of last year. Considering the size of money uncovered, the actual amount smuggled out must be much higher than this.
Since such huge amounts are smuggled out, it is natural that domestic consumption and the economy deteriorate. The bundles of money also rush to the U.S. or Chinese markets, creating bad side effects of speculation in real estate there. It is said that there is a rush of ads on money transfers from Seoul in Korea towns. It is appropriate, therefore, that the government decided to take measures to cope with it.
But checking money transfers is not a fundamental solution. Why has the illegal transfer of money increased so rapidly? It is because of the people’s disappointment at the current government and political community, and their sense of uneasiness over the future of Korea. And the economic prospects are extremely pessimistic. Nevertheless, the government engages in political struggles over the transfer of the capital and righting the wrongs of the past. The president himself leads a drive of chasing foreign investment away with antipathy toward rich people and the ruling party’s anti-business sentiment. The sentiment of despair is not limited to rich people but is spreading to people in general.
The smuggling of assets can’t be stopped by checks and regulations. And we will lose hope if we leave it alone. Smuggling should be stopped completely. But more important is creating conditions favorable for people with money and who run businesses to invest and consume at ease.