Growth pains

Fears have become a reality.

The Bank of Korea has announced that gross domestic production in the fourth quarter of last year decreased by 5.6 percent from the previous quarter. It was a 3.4 percent fall from the same period a year earlier and the first record of negative growth since the financial crisis in the late 1990s.

Negative growth means the economy has shrunk. Naturally, incomes will decrease and so will the number of jobs.

The figures tell us loud and clear that the effects of the global economic crisis had already hit Korea’s economy late last year.

The problem is there’s no sign the economy will be recovering anytime soon. On Tuesday, the Korea Development Institute lowered this year’s economic growth forecast from 3.3 percent to 0.7 percent. The institute expects that the growth rate will record minus 2.6 percent in the first half of the year before climbing back in the second.

We’ll also have to wait until after the second half of this year to see whether the growth rate will get above zero within 2009.

Looking at the figures, there seems to be no way for the economy to be revived in the immediate future.

But if we just give up because we are frustrated by these gloomy predictions, we won’t even be able to grasp at any opportunity that makes an appearance to better our economy.

Statisticians have confirmed that our economy is in bad shape, and nobody knows how deep the bottom lies. So, restoring the markets and creating jobs depends on our resolve and determination.

What do we do? We have to mobilize all possible resources to prevent the economy from spiralling out of control. The government must use everything at its disposal including resources that are already designated for stimulating the economy as soon as possible. And it must be ready to prepare more resources if necessary.

To make sure cash flows into the market, companies must be restructured quickly, and financial companies must be made more resilient.

What’s most important is to believe that Korea’s economy will live to fight again. Korea’s economy has developed despite 5,000 years of poverty. It has overcome an oil shock and the financial crisis a decade ago.

Every citizen’s belief that we can overcome the current crisis provides power to restore our economy. The government must display vision and confidence and help people trust that there is light at the end of the tunnel.