[EDITORIALS]Government retards economyPark Yong-sung, chairman of the Korea Chamber of Commerce and Industry, called our economic situation a “helpless situation with no solution.” No matter how hard the government tries to revive investment and consumption, the economy shows no signs of recovery. Mr. Park said, “Even government officials are admitting that this is the first time in the past 20 years that they have faced policy effects like this.” Our economy seems to have fallen into such a complete slump that no remedies can revive it.
Mr. Park pointed to the political community and the government as reasons for the ailing economy, claiming that they have restrained businesses through regulations and laws rather than helping them in these difficult times. In other words, the government has been demanding that businesses increase investment while at the same time impeding businesses from actually doing so.
The same is true with consumption. In an effort to encourage consumption, Prime Minister Lee Hai-chan said, “I will serve as my master, whoever comes up with a magic potion to make the rich start spending money.” However, in reality, government policies have made the rich close their purses even tighter. The government’s call to “save the economy” is at odds with its policy line that actually damages it, only causing confusion and uncertainty. This is the reason no amount of measures will save our economy.
Many people already know that our economy is in a severe slump. In a survey conducted last week by MBC, 64 percent of the people said that they felt this crisis was even worse than the financial crisis that hit the country in 1997. Only 33 percent replied that although times were hard, this was not a crisis.
The only way to get the economy out of a slump caused by confusion and uncertainty is to set the confusion straight and get rid of the uncertainty. If the government wants to increase investment, it should not make regulations and laws that impede investment. If it wants to increase consumption, it should not implement policies that discourage people from spending money.
If the government wants to save the economy, it should make the issue its top priority and coordinate its policies accordingly.
If that is not what is happening, officials should just frankly admit that they are putting reforms first and that the economy will just have to wait.