[EDITORIALS]Focus on boosting incomes

Korea’s gross national income for the first quarter this year shrank 0.6 percent from the previous quarter, recording negative growth for the first time in a year. It means that although domestic production increased thanks to the hard work of every Korean, the public’s income actually decreased. The Bank of Korea explained that the downturn was caused by deteriorating trade conditions amid rising oil prices and a strong won. Exports hit yet another monthly record high, but the trade loss caused by such worsening conditions also hit a record high of 16.8 trillion won, meaning we are exporting products only to make a financial loss.
That is why the solid growth in the first quarter GDP, which rose 1.2 percent from the previous quarter and a whopping 6.1 percent from the year earlier, is not felt by ordinary Koreans, since most of them see less income flowing into their pockets. And that is why ordinary Koreans do not really understand when the government speaks so hopefully about how the nation’s economy will expand 5 percent this year.
What’s worse, we see increasing signs that the government’s rosy forecasts for this year’s economic growth may be based on wishful thinking. The business cycle indicator, which forecasts the movement of the economy, plunged below zero for the first time in 19 months, while the business survey index, which shows local companies’ business confidence, continued to decline. Corporate infrastructure investment is unlikely to revive, while companies small and large are fearing that the situation might worsen. Consumer spending is also unlikely to increase, as people’s incomes remain stagnant.
Private economic think tanks are now rushing to lower their targets for this year’s economic growth rate. GDP growth of 5 percent is unlikely to happen, and many market observers are worrying that even a 4-percent growth rate is unlikely. Koreans, who have suffered from the low economic growth since this administration took power, are giving up their hope towards better days and again facing a long tunnel of economic depression.
Despite such an urgent situation, the government is busy excusing itself, by citing such external factors as rising oil prices and the strong won. The government is even saying it will not use any “artificial measures to boost the economy,” showing a pitiful attitude that only draws the public’s ire. Now the government needs to dump its nearly-failed real estate policies and focus on reviving the sagging economy.