First, build trust

On Monday President Lee Myung-bak urged the National Assembly and the political community to make large-scale efforts to forestall the economic crisis that we are currently facing. His speech was aimed to seek the National Assembly’s cooperation to pass the budget bill for next year with increased expenditures, in an effort to prevent the financial crisis that started in the United States from spilling into our economy.

The president’s speech was timely, determined and contained measures to overcome the crisis. But the speech wasn’t moving. It failed to make people believe that they could actually overcome the crisis if they trust the president and the government and do what they are being asked to do. The speech failed to give us hope that if we endure hardship and sacrifice for the time being, a brighter future awaits.

The Bank of Korea lowered the key interest rate by 0.75 percent, its largest cut ever, in a drastic measure to revive the financial market, but it failed to calm uncertainty in the market. President Lee guaranteed that there won’t be a financial crisis of the kind that we experienced 11 years ago. The president said the foreign currency liquidity had worsened but it could be handled, and he predicted that the foreign currency reserves and foreign currency liquidity would improve. He also promised that until the insecurity in the market had calmed down, the government would provide currency liquidity in a pre-emptive, sufficient and decisive manner. He promised to increase government spending by a great deal in preparation for a possible slowdown in the real economy and to prepare pre-emptive measures to boost domestic consumption in preparation for poor exports.

In the speech, Lee mentioned nearly all possible reasonable measures that the government could present to overcome the looming crisis, which we believe are set in the right direction. But his measures and promises are not appealing to the people and the markets because of a lack of leadership and trust. The most urgent need is to restore the peoples’ trust and to re-establish leadership. The government’s understanding of the financial crisis must change. In emergencies, detailed measures are required, but decisive action, rather than words or principles, can move the people and induce their cooperation.

Now what’s most needed is leadership that can unite not only the people but also the ruling and opposition parties, to take responsibility and to confidently ask the people to make sacrifices.