[Outlook]Goals for growth must be realistic

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[Outlook]Goals for growth must be realistic

Candidates’ election pledges are often called pies in the sky. In Korea, they are simply called empty promises. Candidates make them recklessly in a bid to defeat rivals and then lambast one another for not keeping their word. Some laypeople even advise voting for the candidate who makes the fewest promises because that person is least likely to disappoint voters.
The most important thing when making pledges is not to overpromise. One should refrain from using such expressions such as “by all means,” “eradicate,” “ guarantee,” “terminate” and “absolutely while I am in office.” These far reaching promises raise people’s expectations and set them up for a fall later, leading to distrust of the government and cynicism about politics.
Because our economy is slowing down, presidential hopefuls have started competing by making promises to improve the economy.
That can be good news, but some worry that they are too far reaching. Promising to achieve a certain economic growth rate is one such promise.
The economic growth rate is the result of the collective economic activities of a country. In foreign countries it is rare that candidates talk about economic growth rates when running for office. But still, the topic has become a core issue in every presidential election here because there is little understanding of economic growth.
President Roh Moo-hyun confessed recently that he made an empty promise during his campaign. He said that after Lee Hoi-chang, the Grand National Party candidate, pledged to achieve a 6 percent growth rate, Mr. Roh said 7 percent without any basis to back up his promise. The president added that during the election, he would keep an eye on what candidates who knew economics well were promising and made sure his promises matched or went higher. This led to an inflated, unrealistic target for economic growth.
In the upcoming presidential election cycle, Park Geun-hye, the Grand National hopeful, has begun the race by promising a 7 percent growth rate. She arrived at the figure by combining the expected 5 percent growth and an anticipated 2 percent extra resulting from her leadership. The presidential aspirants are having a field day criticizing it.
The Blue House chief of staff made a catty remark, “As some call a 5 percent growth rate an economic disaster, one should promise 10 percent, at least.” Is a growth rate an arbitrary number that can be altered at one’s will?
During the era of government-led development, growth was rapid and to set a growth-rate goal was to some extent meaningful. However, since our economy has entered the world’s top 12, we can no longer expect such a rapid rate of growth.
As post-industrialization has progressed, the growth engine for commodities manufacturing is losing its power while other sectors for value-added products and services have a long way to go before becoming fully developed.
Both the labor and capital markets are getting tight as companies invest little, families become small, the populace ages and an increasing number of workers work five days a week, instead of six.
Few will oppose a promise to achieve 7 percent growth and such a promise might be realistic. However, a promise to achieve a certain growth rate is inappropriate as a campaign pledge. If a president becomes obsessed with the goal, he or she will mismanage the economy. A growth rate cannot be achieved the way a goal to increase exports can. Sometimes exporters sell items at lowered prices to reduce stocks or ship products one year earlier than planned to reach the goal on paper. If input pours in for a short period, overheating can damage a growth engine. As there are too many variants inside and outside the country, such a promise is highly likely to turn out to be empty words.
Even though China’s economy has been growing at 10 percent per year, the government is not obsessed with reaching a certain growth rate. It merely changed its goal from “rapid and healthy growth” to “healthy and rapid growth.”
Urgent tasks that lie ahead for the hopefuls are to restore a growth engine and to establish democratic leadership that unifies the country by balancing the aspirations that have soared since democratization. A dynamic economy works a lot better than policies focusing on the fair distribution of wealth to narrow the gap between the rich and the poor, as seen in many countries in the world. The only way forward is to create more jobs by revitalizing the economy and enhancing education to adopt new technologies.
The presidential aspirants must stop toying with numbers. They should mobilize national capabilities, present a model for Korea to make one more leap and develop tangible plans to back the model.

*The writer is a senior columnist of the JoongAng Ilbo.

by Byun Sang-keun
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