[Viewpoint]The political approach

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[Viewpoint]The political approach

I don’t know much about economics, but even I am 100 percent sure that the current economic crisis is far more serious than the one that resulted in a bailout for Korea by the International Monetary Fund in 1997. The crisis in the ’90s was limited to Korea and a handful of other, mostly Asian, countries. The United States and Europe were largely unaffected. The won-dollar exchange rate skyrocketed then as well, but this actually helped Korea overcome the crisis.

As the value of the won fell, Korean exporters became more competitive, and Korea produced record-breaking trade surpluses. The country paid back the IMF loan before the due date, thanks to the solid international economy.

But this time, the entire world has entered a serious economic slump. Developed countries have already recorded negative growth, and growth rates for emerging economies are slowing drastically. Even if we try to sell goods at low prices, there’s no one to buy them. Exports are already shrinking. Seventy percent of the Korean economy stems from trade, and it can survive only when we export. Domestic economic stimulus plans through tax cuts and increased government spending have limited effect.

Unless the global economy gets better, the “economy-savvy” president cannot save the country from the crisis. We only hope that U.S. President-elect Barack Obama’s new New Deal program has the desired effect and wait for the U.S. and global economies to revive. Until then, Korea’s economic crisis is likely to continue.

So it all boils down to one conclusion: We have to endure the difficulties. We are now in a fight for survival. When the country is shaken, many economic players will fall behind. But we should embrace them all, bide our time and make sure we survive. No matter how knowledgeable the president is about the economy and how competent economic officials are, the situation cannot be undone. It is no longer a matter of economic policy but of survival.

What we need now is not an economy-savvy president, but a political one. We need a president who stretches out his hands to the socially weak, does not take sides, embraces all citizens, cries and laughs with the people and has a warm heart.

When the Titanic was sinking, the elderly, children and women were allowed to board lifeboats. Giving them priority was just and humane. In these times of economic crisis, the lifeboat’s seats and the life vests should be given to the most vulnerable, namely small-business owners, the unemployed and temporary and irregular employees. This is the best way to prevent the entire society from sinking.

A friend of mine runs an export-driven small business, and he says there has not been a single order since October. He plans to deal with the crisis by using previous earnings. If the money runs out, he will cut wages and expenses. But he wants to keep all his employees if at all possible. That is why he is willing to sacrifice the company’s reserves rather than lay off workers.

In order to overcome the crisis and prepare for the future, we need restructuring. However, everything has a right time. We have reached a social consensus that reform of public corporations is necessary, but ordering them to suddenly downsize their workforce by 10 percent is too harsh. It might be better to encourage more efficient management by cutting wages and minimizing layoffs.

The comprehensive real estate tax might be flawed but it is inappropriate to fix it right now. It will be criticized as offering tax cuts to the rich when average citizens are suffering.

Is it so urgent at this point to investigate corruption allegations among insiders from the last administration?

President Lee Myung-bak met with the country’s elder statesmen on Dec. 10. He made a surprise visit to Garak Market. He needs to take one more step.

Why doesn’t he bring together all the former presidents, from Chun Doo Hwan to Roh Moo-hyun and stand united against the crisis? He can leave the economy to someone who is trusted by the market and focus on politics. This is the way to come closer to the hearts and minds of citizens.



*The writer is an editorial writer and traveling correspondent of the JoongAng Ilbo.


by Bae Myung-bok

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