[OUTLOOK]Change must be welcomed

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[OUTLOOK]Change must be welcomed

The Chinese Communist Party claims to represent advanced productive forces, advanced culture and the interests of an overwhelming majority of the people. These were the “Three Represents” doctrine that former President Jiang Zemin had declared in February 2000. This is an unorthodox approach introduced as part of an effort to embrace capitalist entrepreneurs in the Communist Party.
Capitalists are not part of the traditional labor class, but they are part of the overwhelming majority of the people. When opinions within the party were divided over the acceptance of these “red capitalists,” then-President Jiang used the ancient saying “yeosigujin,” which roughly translates to “the times have changed and so must our mentality and our people.”
It is reported that Lee Hun-jai, the Korean minister of finance and economy, used this same saying in his New Year’s address to ministry officials and employees.
While Mr. Lee must have meant to urge officials of his ministry to read the changes of the times and to prepare themselves, to me, it sounds as if he were referring to the Korean economy this year.
Beyond the employees of the Finance Ministry, this message might be addressed to people from all walks of life who are involved in the economic policy-making process. These would include Blue House officials and even some “386-generation” politicians. This message sounds closer to the progressives in the conservative-progressive spectrum of politics, but its meaning is more toward “coordination” than “reform.”
I had an opportunity to hear the minister’s thoughts at the beginning of the year, and it seemed that he was very much interested in the restructuring of the economy.
While the manufacturing and finance sectors underwent considerable change after the financial crisis in 1997 with the intervention of the International Monetary Fund, the agricultural and services sectors are still badly in need of care. It seems that the “yeosigujin” message was aimed in particular towards the agricultural and services industry.
Take, for example, the rice market negotiations that concluded at the end of last year. The pros and cons of tariffs versus tariff rate quotas might differ depending on one’s view. However, looking back on our record over the last decade, it is difficult to have confidence in the decision to delay the lifting of tariffs for another decade.
In 1995, when the Uruguay Round negotiations were concluded, the government proclaimed it would mark the year as the turning point for developing our farming and fisheries sectors. That’s when the government started levying a special tax to support farmers and fishermen. Some 60 trillion won ($57 billion) was given to them but to no avail.
According to the original plan, to enhance the competitiveness of domestic rice to about 160 percent of the international price, 40 kilograms of rice should be 70,000 won ($67), instead of 200,000 won, as it is now. In the past 10 years, the international price for rice has dropped 25 percent, but Korean rice costs 53 percent more.
It is not time to act in leisure when the farmers do nothing but demand renegotiations and the government appoints an agricultural minister according to farmers’ demands. We must change the emotionally charged minds of farmers to ones of reason.
The government seems to think that it can fritter away by blindly pouring 100 trillion won again and then passing the buck to an unfortunate administration that will be in power in 2015.
However, the service market will not wait that long for us. The domestic consumption of high-income families in services such as education, legal service and tourism has rapidly decreased, while consumption abroad has skyrocketed.
The government is planning to establish a ministerial-level council on the services industry in the first half of this year and review overall measures of protection and regulation on 40 domestic industries included in the Doha Development Agenda.
However, opening the market could destroy, rather than stimulate, our domestic industry’s competitiveness. This also goes for services that are not under immediate pressure to open the market, as well.
For example, if the number of taxi riders are on the decrease, and yet more and more permits are issued, then the average income of taxi drivers cannot help but shrink. The recent unprecedented street rally of restaurants owners was partly caused by the fact that there are just too many restaurants in this country, with a ratio of one restaurant for every 70 people.
Yet, we still haven’t found any solutions to these problems. Taking a few won off the gas tax won’t save the taxi industry, and appealing to the public to start opening their purses are not real solutions.
The productivity level of our service industry is about half of that in Japan. The ratio of those operating their own businesses to those who are employed is about three to one. Without radical restructuring, we won’t be able to escape this recession that is holding us back.
It seems to be the trend these days to quote old sayings in reply to what one’s bosses say. I do not know what Lee Hun-jai’s intentions were in saying “yeosigujin” to his ministry’s staff, but it seems that he was reminding us that we, who claim to be an advanced economy, should at least be as adaptable to changes as socialist China is.
Have a happy and prosperous new year.

* The writer is an editorial writer of the JoongAng Ilbo.


by Joseph W. Chung

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