[Outlook]Our test for crisis management

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[Outlook]Our test for crisis management

After the rumors of a September financial crisis subsided, more fears of financial crises have cast their dark shadows over the nation. Even though people’s feeling of insecurity is escalating, a contradictory phenomenon has started to surface in which people cannot sensibly grasp the facts of the crisis. In a word, people’s confidence and sense of direction toward the future of the country are faltering.

In such times when an individual or a country is confronted by unexpected challenges, it is necessary to examine just how prepared we are to deal with a crisis, rather than being captivated by fear of the crisis itself.

In recent weeks, we have faced severe situations of two great crises that have held the whip hand over national destiny. First, the American financial system, the center of the global financial market, is standing at the crossroads in dealing with chain-reaction bankruptcies. The Korean market is helplessly drawn into the whirlpool of serious economic uncertainty, now that it is part of the worldwide market.

Secondly, Korea is also facing a crisis of uncertainty driven by the illness of North Korean leader Kim Jong-il. Since the Korean Peninsula became important part of world history caused by North Korea’s strong isolationist policies, it is widely considered the last national crisis that Korea should overcome: the last Cold-War era divided country in the world.

However, regardless of whether a crisis originates in New York or Pyongyang, or the extraordinary nature of the circumstances such as the globalization of Korea or North Korea’s isolationism, these crises should be seen as a test case for Korea’s crisis management capabilities.

So what can a nation’s capacity for crisis management be judged on?

A nation’s readiness and crisis management skills should encompass capabilities such as its capacity to identify the characteristics and content of the crisis thoroughly; a capacity to devise appropriate crisis recovery plans; a capacity to choose specific alternative strategies and implement them efficiently; a capacity to establish a joint cooperation system with allies in the international community; and a capacity to set up and run a crisis management system in advance that will guarantee the sustainable and consistent implementation of the aforementioned capabilities. In particular, we need to realize that far-reaching, nationwide consensus-building and strong leadership are prerequisites for managing a crisis, such as the current crisis facing us.

Economic experts too numerous to count, offered their ideas about the characteristics of the American financial crisis and how the American government would react. So how can they be assessed from a political perspective? The crisis is serious. The fact that the Bush administration had to release an exceptionally large-scale rescue plan at an early stage of the crisis can seen as positive in a variety of ways, including timely judgment and promptness in action. However, despite the sensitive timing - the remaining few weeks of the U.S. Presidential election - the fact that the Bush regime only just managed to gain approval from the Congress after many twists and turns, represents that his political leadership and ability to build the national consensus required for crisis recovery were stretched beyond their limit.

The current financial crisis in the United States seems to bear important resemblance to the 1990s crisis in Sweden. Between 1990 and 1993, gross domestic product fell by 6 percent and unemployment skyrocketed from 3 to 12 percent, causing a rash of bankruptcies in the Swedish financial market. However, the country showed its excellent capabilities to recover from the economic crisis, based on consensus between the ruling and opposition parties, promptness and transparency of the government’s action. There is a great deal that we should learn from Sweden’s success in dealing with their crisis.

We really feel that the financial crisis is an urgent problem to deal with, while the crisis of uncertainty in North Korea is a potential one. Now that the inter-Korean relations predicate a considerable degree of danger, we should adopt the preferable attitude of being scant of word and thoroughly prepared for all potential dangers.

Both Koreas will continue to undergo changes over the course of history. Over the past 60 years, Korea has overcome numerous difficulties of change. If we fear on-going change, we are courting trouble. However, if we can be equipped with a capability for crisis management to consider change as an opportunity to tackle difficulties, it will serve to guide us toward peace and reunification.

The question is now how we can build a national consensus to develop a capability for crisis management. What are the values that we need to protect? What kind of a society is the national community that we are trying to establish? To this end, we should establish a national consensus guaranteeing that we are firmly resolved to making any sacrifices, a focus of the present national crisis management.

Now is the time that leaders from both the ruling and opposition parties should make greater efforts together to tackle a national crisis.

*The writer, a former prime minister, is an adviser to the JoongAng Ilbo. Translation by the JoongAng Daily staff.

by Lee Hong-koo
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