[EDITORIALS]Restore economic confidenceThe essence of Korea’s economic problem is that the economic players have lost confidence in the economy’s future prospects and this, in turn, has brought worries over its medium- and long-term growth potential. It is not a short-term problem of when the economy will revive, but a problem related to its longer-term potential. This was the diagnosis the Korea Development Institute, a government think tank, made of Korea’s current economic situation.
The deputy prime minister of finance and economy, Lee Hun-jai, admitted in a speech that losing growth potential is a problem. Mr. Lee said that voices expressing concern over losing growth potential, because of the rapid aging of our society and the lack of investment resulting from a weak entrepreneurial spirit, have grown louder.
Though it is belated, the government and the think tank have recognized that, in the center of the current economic uneasiness, lies the problem of the “weakening confidence of economic players and dying entrepreneurial spirit.” Now, it all depends on what remedy the government and think tanks prescribe.
President Roh Moo-hyun said “the problem lies in the economic system” in his policy address to the National Assembly, and indicated that he would pursue the “development of human resources, development of technology and consolidation of the open competition system.” He emphasized that he would promote policies that strengthened national competitiveness consistently. He also said we needed a medium- and long-term strategy with which to overcome fundamental difficulties.
But strategies and policies will be of no use if the economic players do not accept them. More important is the economic players’ confidence in the nation and society. They should not be left worrying that the businesses they started with their own money could be handed over to others. The next issue is social stability. We cannot expect economy alone to move smoothly while politics and society are in chaos. When the future prospects are not clear, strategies and policies, whatever they might be, cannot produce the proper results. To make economic players work without worrying, the government must make society predictable.
When such circumstances are created, economic players will become confident, the entrepreneurial spirit will revive and growth potential will grow.