[VIEWPOINT]The fate of reform in 2 nations

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[VIEWPOINT]The fate of reform in 2 nations

I am suddenly reminded of a talk I had with a Japanese a few years ago. It was some time after South Korea suffered from the foreign exchange crisis in 1997. I asked him why Japan was so quiet while Korea was back on its feet, thanks to a series of reforms, and had hopes for an economic recovery. At that time, Japan showed no sign of taking action, despite a 10-year-long economic stagnation. He answered, “It seems that you don’t know Japanese people well. It takes some time for Japanese to set their minds on a goal. Once the goal is set, however, the Japanese will push ahead without hesitation and in perfect order.”
After that, there was a change in prime ministers in Japan and the new prime minister emphasized reform slogans. Korea had a new president too, and we also started reforms. Japan has been gradually but continuously working on reform for the past four years, and Korea has loudly and powerfully pursued reform for two years. When the energy for reform started to fizzle out, Japanese Prime Minister Junichiro Koizumi threw the card of dissolving the lower house to rekindle the flame of reform. Riding on the high tide of election victory, he launched a new cabinet and even paved the way for picking a successor who will take over his reform programs. What a contrast from Korea’s governing party’s defeat at the by-elections amid a low support rate.
Mr. Koizumi fought desperately in the beginning, too. However, he started reform in an easy way. He attended a high-tech product exhibition and said, “What is reform? Isn’t reform making good products like these companies are doing here? Let’s bring one into the prime minister’s residence too.” As a result, corporate investments revived and youth unemployment decreased. He won the election thanks partly to such economic successes and accelerated reform efforts. He elucidated, after the election victory, that he would not stay in office after next September. Mr. Koizumi is evaluated as the one who lit the fire of reform and built a firm base for the future. Unlike the predictions made when he first appeared, Mr. Koizumi will go down in history as a prime minister who has served in the office for a long time.
Of course, President Roh Moo-hyun still has time to achieve results in reform. Since he still has two and a half years left, he can achieve visible accomplishments and create a situation in which he designates a successor to follow him. But he has to change his reform methods. The course of reform in Korea and Japan have been very different up to now. Mr. Koizumi has directed his country to the right instinctively. He did so not only in diplomacy and security, but also in the economy in particular. As a measure to cope with China’s rise, he held hands firmly with the United States and made Japan’s alliance with the United States the closest since the time of former Prime Minister Yasuhiro Nakasone. This diplomatic route has caused a lot of protest from many Asian countries and has caused criticism domestically, too. Nevertheless, Japan has restored stability in diplomacy and national security. It is quite a contrast from Korea’s stance of keeping its distance from the United States and pursuing independent diplomacy.
The difference is even more distinct in the economic field. Korea turned slightly to the left, from focusing on growth to putting more emphasis on equality and distribution of wealth. Instead of pursuing a small government, Korea preferred to keep a large government and increased the welfare budget to a great extent. Recently, there has been a new slogan in our society: “Taxes for the rich and welfare for the poor.” As a result, the scale of the government budget has increased in a big way and taxes were raised aggressively to fill the gap in revenue. The national debt is increasing drastically, too. It is only natural that the private sector reels under the pressure.
Meanwhile, Japan has made sure that the country’s economy moves in the direction of a market economy. By reducing the power and influence of the government, Japan tried to revive the vitality of the private sector. The Japanese economy in the past was actually under strong influence from the government and had a high dependency on public enterprises, so as to be called a socialist economy. The Japanese are now trying to reduce the influence of the government drastically.
Mr. Koizumi dissolved the lower house on the pretext of the upper house’s rejection of the privatization of Japan Post, but he received overwhelming support from the people by focusing on the issue of whether Japan should promote reform continuously or not during the election process. In other words Mr. Koizumi drew people’s support by embracing the mainstream of society and presenting visible and practical reform programs.
Mr. Koizumi’s reform may seem not thorough enough, rather lukewarm, compared to a loud reform process that involves huge public debates and aims at realizing social equity by changing the mainstream forces of society. However, the Japanese method may provoke less social resistance and protests. It can be said that Korea and Japan are taking part in a contest of reform in their own ways, and it is a huge test upon which depends the fate of the two countries.

* The writer is a columnist for the JoongAng Ibo. Translation by the JoongAng Daily staff.

by Choi Woo-suk
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