[Viewpoint]A political solution

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[Viewpoint]A political solution

The turmoil in the financial markets is certainly due to the reckless expansion of the market economy. However, we should also bear in mind that the selection of policies, strategies and means to recover from the current crisis is political in the long run. Above all, both the leadership and the public should recognize the importance of the fact that the problems we face are political, and that the situation serves as a test bed for the country’s crisis management capabilities.

When we recognize this as a political crisis, we can find clues as to how we may overcome our predicament. If we are remiss in our duty to examine the soundness of our politics, as is much economic news, then the financial turmoil will result in a serious political crisis, consequently threatening the nation’s security.

Economic and political arguments are currently under way in every corner of the global community due to fears of a global financial breakdown. It is beyond doubt that the accelerating globalization in the markets has greatly contributed to the world’s amazingly rapid economic growth in the wake of the Cold War.

However, it is debatable whether, in the process of market globalization, we have maintained a well-balanced relationship between a free and open market and the government’s responsibility to control the market in order to promote the public interest and economic stability. The worldwide economic turmoil definitely raises this question.

The continuing controversy surrounding the relationship between the market and the state provides the Lee Myung-bak administration with a particularly tricky political task as it deals with the global troubles. President Lee Myung-bak defined the governing philosophies and policies of the Roh Moo-hyun administration as basically anti-market during the presidential election campaign and inauguration process, and has strived to differentiate his policies from those of his predecessor. He underlined the importance of pushing forward with his market- and corporate-friendly policies in a way that expands market autonomy and fosters deregulation, for the purpose of revitalizing the ailing economy and achieving high economic growth.

However, as we are now unfortunately confronted with severe economic woes, it has become difficult for our economic policies to continue to focus on spurring autonomous growth and deregulation in the market. America was the epicenter of the crisis because of its market-friendly policies. It would never be easy for the political leadership to try to persuade people to accept an inconsistent idea that simultaneously emphasizes market freedom and moderation - i.e. deregulation and strict control.

Above all, an absolutely indispensable condition to recovering from serious economic turmoil is a high level of public support. As a rule, an economic depression is likely to put heavier burdens on poor people rather than distributing its problems evenly. At this juncture, the leader is in a position to protect the values of a market economy and democratic politics at the same time.

He should maintain his focus on how to protect the basic welfare of the people and spare no effort in winning the sympathy of the public. By doing so, his policies devised to recover from the economic crisis will serve to achieve the desired result.

He should be poised to strive to reach across the aisle, drawing on bipartisanship and making his political position more flexible in order to remove the basis behind the misunderstanding that the president holds market principles as the absolute law.

Then, he will succeed in establishing a firm political position from which to successfully cope with both economic and political woes.

Nebraskan Senator Chuck Hagel, who visited Seoul a few days ago, stated his views to U.S. presidential candidates Barack Obama and John McCain as they pull out the big political guns in the final push for the White House.

“America now faces a fatal crisis at a historical turning point. The next president will require bipartisan and extensive public support. I hope that they will never make cynical comments that may hurt the feelings of each other or of their supporters, and make it difficult to unite the people in the long term,” said Hagel.

The two candidates agreed with his idea from the bottom of their hearts. It made me think that America is strong enough to have hope and to show its real ability in recovering from the economic turmoil in a political manner.

We had considerable success in terms of structural reforms in the financial and corporate sectors while experiencing a painful financial crisis a decade ago. However, the political sector was not overhauled.

We are facing another economic crisis that will likely cause us shared pain over a potentially lengthy period.

Against this backdrop, we need to overhaul the political system to enable us to join forces and achieve active participation and support from the public. Is it impossible that 180 lawmakers can become a major force for political reform in the 18th National Assembly, as, led by the Assembly speaker, they participate in research groups to amend the Constitution?

When the leader and the people can answer that question, we will discover the final clue toward recovery from today’s economic woes.

*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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