[EDITORIALS]A nonexistent economic policy

After four months of rising, consumer sentiment in Korea has begun to fall. A survey shows that those in their 30s and 40s, the people who make up the core of society’s economic activity, are particularly discouraged as consumers. This fact casts a shadow over the chances for economic recovery. Automobile sales, a representative consumer good, were down by 6.7 percent last month compared to the previous year. That is a sign that consumers are tightening their purse strings.
Consumer sentiment is always changing, so it may be a stretch to conclude from these numbers that the economy is going to get worse. But it is not usual that the index showing consumer expectations, which the government had been touting as a strong sign of a recovery, has turned around.
We have not seen tangible evidence this year that the economy is actually getting better, except for a few consumption indices. Domestic consumption has been generally slow, and exports, the pillar of our economy, are showing unfortunate signs of weakening. Conditions are getting worse than they were last year due to the reevaluation of the won, the nuclear crisis in North Korea, an economic slowdown among advanced countries and rising international oil prices. Consumer sentiment was encouraged for a while by strong stock markets, but they, too, are now plummeting.
Furthermore, the government’s stern measures to control real estate prices have thrown a wet blanket on the consumer sentiment of the upper class, which had been slowly regaining a desire to spend. In the midst of this crisis, the president says repeatedly that he will not use the real estate market to revive the economy.
The Roh administration had promised to put all its efforts into reviving the economy. But that promise seems to have been forgotten in the midst of domestic and international confusion having to do with judicial reform and North Korea. At the moment, the government seems to have no economic policy other than controlling real estate prices. While debate abounds over easing restrictions, companies are reluctant to invest. If this continues, there is no guarantee that the economy will recover in the second half.
If the Roh administration still has not turned the economy around after three years in office, it cannot blame “crisis theories” or the previous administration for its failure. However belatedly, it is time for the government to actually make the economy its top priority.