[EDITORIALS]The finance minister’s roleAs the economic recovery slows, business and the government are blaming each other. The economic growth rate was a mere 3.4 percent in the second quarter of this year, while business investment in facilities increased by just 2.8 percent.
Unless investment recovers, there is no future for the economy. The chairman of the Federation of Korean Industries said complex regulations were to blame. “Without lifting regulations on corporate governance or business investment, it will be difficult to see an economic recovery,” he said.
In response, the finance minister argued that the economy had not recovered “either because companies have failed to find profitable new businesses, or their commitment to research and development is weak.” He added, “Companies with 70 trillion won ($68 billion) in cash complain that regulations make it hard to invest. They sound like they’re rallying against the government.”
As the finance minister has said before, the economy is reactive. And yet the president talks of a coalition government. The government’s measures to curb real estate speculation are unlikely to stabilize prices. Business investment did not improve even after the government declared early this year that it would focus on the economy. So what business would invest when the government seems focused on politics?
The finance minister’s role is more important than ever. He should stop studying the face of the president and bashing businesses by saying, “Small apartment prices did not increase because the [real estate] market is stable. It proves that the policy is effective.” The finance minister should understand the complex economic trends, and should integrate and mediate between economic policies.
The Finance Ministry has never been so desperate to get short-term accomplishments without having a long-term view. The ministry has intervened whenever the Bank of Korea was likely to raise the call rate, and has concentrated on the won-dollar exchange rate. The government seems to cling to the quarterly growth rate as if it meant everything.
The role of the senior presidential secretary for economic affairs is not what it used to be. Economic policies urgently need integration. For that, the Finance Minister should see reality. He should look at the economy with a balanced viewpoint, rather than strive to please his superiors.