[Outlook]Sweet nothings

‘If you marry me I’ll make sure you don’t need to lift a finger for the rest of your life.”

“I can’t promise I’ll become rich and successful, but I’ll do my best not to make you go through hard times.”

If you were a woman, which of these two men would you choose to marry? I would choose the latter. It’s tough to trust a person who makes promises too easily, when an uncertain path lies ahead. But there must be a reason why the first proposal has become typical from men popping the question in Korea. Wooing is a romantic, dramatic fantasy world far removed from reality. If a man remains honest, he will look like a wimp amid a crowd of others who are exaggerating and lying.

However, this archaic style of proposing should go the way of the Dodo, as both husband and wife need to take responsibility for a household. A similar update is required for our capitalist society, in which the marketplace, not the president, is supposed to make the economy grow. Unfortunately, an old-style method is still commonplace in our presidential elections. Former President Roh Moo-hyun confessed that he had pledged to achieve a 7 percent growth rate just because his rival Lee Hoi-chang had said 6 percent. President Lee Myung-bak won the people’s hearts with his “747” pledge. He promised 7 percent economic growth every 7 for 10 years, leading to a doubling of the national per capita income.

Now, the 747 hasn’t even touched the runway; it’s stuck inside the hangar. The president would like to say that it is because of bad weather that no one could have foreseen. But the people are understandably angry ? after less than half a year of marriage, they are already facing hardship instead of living a happy and luxurious life. They might suspect the husband purposely lied from the beginning, or even ponder annulling the marriage.

Prices of oil and raw materials can’t shoulder all the blame. The responsibility also lies with those who filled the people’s heads with expectations that the economy would boom once the new administration came in. They said the period when the two previous administrations were in office was a lost decade in terms of the economy. But from the year 2000, when our economy escaped from the foreign exchange crisis, up until 2006, our economy saw average annual growth of 4.5 percent in gross domestic product per capita. That was 35th among around 170 countries in the world, and most countries above us were developing nations.

Korea has reached a stage of stable growth. A country with a population of over 5 million has never sustained a 7 percent growth rate for more than 10 years. The chances that President Lee’s pledge would come true were very slim from the beginning.

The forecast that a high growth rate would solve social and economic polarization also needs rethinking. As China rapidly advances, Korea’s manufacturing industry is losing its capacity to employ workers. A surplus of workers is fighting fiercely for their livelihoods in the wholesale, retail, food and accommodation industries, while educated people in finance, business services and telecommunications make ever-increasing incomes. How can growth solve polarization by itself?

The incumbent administration made two major mistakes. First, it promoted economic reforms as if their effects would appear within a few months, when we need to be patient waiting for the effects. Second, it was lazy in monitoring the economic radar. It was last summer when crop prices started to soar. Of course, it was difficult to expect oil prices would surge as they are now. But by February, prices had jumped from $50 to $100 per barrel within just a year and the presidential transition team was operating at the time. In its January World Economic Outlook, the International Monetary Fund lowered the world economy’s growth rate by 1 percentage point from last year and forecast Korea’s growth rate to below 4.5 percent. The administration was watching the sky, and didn’t see the ground sinking.

It is not too late, however. Only four months have passed since the government took office. The 747 plan must be abandoned immediately. The administration must be prepared for a lower growth rate than that of “the lost period” for the first half of its term. It must apologize to the people for its arrogance and lax attitude and appeal to them to share the burden. In order to quell the rage of low-income people, the administration must enact policies against polarization, instead of trying to treat negative symptoms without guiding principles.

If the administration fails to find a balance between commodity prices and polarization, the sky may fall for both the administration and the economy.

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

by Song Eui-young