[Viewpoint]A. Lin Neumann

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[Viewpoint]A. Lin Neumann

Change of government is a topic these days no matter where you go. In the United States, the Democratic Party, which already controls congress, is aiming to take over the presidency in the next election by riding the tide of public dissatisfaction with George Bush. The Democratic Party of Japan, led by Ichiro Ozawa, won the largest number of seats in the Upper House in recent elections. Japanese people shudder at the corruption scandals involving cabinet ministers under former Prime Minister Shinzo Abe, who resigned prematurely. Therefore, the possibility of a change of government in Japan in the next general election is higher than ever.
In Korea too, the possibility of a change of government is higher than before. But change does not take place automatically. There must be a new vision and policy that captures the people’s imagination.
In the United States and Japan, the confrontations between the ruling and opposition parties over new visions and policies is getting fierce. In comparison, the policies being presented by rival parties in Korea are still very weak. Candidate Lee Myung-bak has chosen the economy as his main topic, and has secured a favorable position in the election campaign by doing so. Since the primary candidates of the Unified New Party are aware of this, they adopted “growth” and the “people’s economy” as election slogans.
Candidate Chung Dong-young’s slogans ― “Let’s be the seventh strongest in the space and aeronautical industry” and “Let’s build a society where 40 million people belong to the middle class” ― both reflect this. They are worthy targets, but the question is whether they reflect the spirit of the times and can be differentiated from the slogans of the Grand National Party candidate.
Let’s take a look at Japan. The administrations under Koizumi and Abe both followed a growth-oriented policy. As a result, social polarization grew in Japanese society.
To offer an alternative, Ichiro Ozawa of the Democratic Party claimed, “Defend employment while fighting against polarization,” as his campaign pledge. As action plans to go with his new policy, he presented ideas such as raising the minimum wage, giving equal treatment to irregular workers and providing assistance to younger people seeking employment.
Except for the plan of providing assistance to small and medium businesses, there is basically no growth-related element to his policy. As an opposition party, distinctive policy guidelines like this have attracted the people’s support. It is ironic that the left-leaning Ozawa’s policy guideline is more in the people’s interest than those of Korea’s Unified New Party. The party should draw up a blueprint for the people’s economy instead of shouting “growth” in imitation of the Grand National Party’s candidate.
As the candidate of a conservative party, it is noteworthy that Lee pays attention to the livelihoods of those living at the grassroots level by pledging to provide free day care service for children from low-income families. But it will ultimately be his growth policy that decides the election in his favor.
The time is right for a sustainable growth mechanism to take root in our society. Implementing it could be Lee’s role in history, if he has one. I do not think that plans like “Republic of Korea 747” and the “Korean Peninsula Grand Canal Plan” will bring the growth we need. They miss the mark of the vision our time demands.
There are two ways of achieving economic growth. One is increasing the input of resources, and the other is improving the productivity of the resources we use. Up until now, we mainly relied on the former for economic growth, but advanced countries emphasize the latter.
For example, the growth policy of the Liberal Democratic Party of Japan calls for achieving an annual real growth rate of 2.2 percent in the coming 10 years. It is worth noting the strategy it employs to achieve this. The core of the Japanese strategy lies in achieving two-thirds of the goal through technology innovation, improved productivity, an improved service industry and improved human resources.
In the 1980s when the income level of Koreans was close to that of the Japanese, Japan’s economic growth rate was 4.4 percent. Candidate Lee pledged to achieve a 7 percent growth rate, which is not bad. But the problem lies in Lee’s strategies. Promoting investment in Korea by easing regulations and constructing a grand canal both follow the existing strategy of increasing the input of resources.
That is not what we need at our present stage of development. In the 1980s, Japan had already achieved half of its growth rate by improving productivity, rather than increasing the quantity of its resources.
What is needed for South Korea, which is on the threshold of becoming an advanced country, is growth through productivity improvement. If Lee insists on “a grand canal” plan, it will boomerang on him, lowering his approval rating.

*The writer is a professor of economics at Saitama University, Japan. Translation by the JoongAng Daily staff.

by Woo Jong-won
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