Hard realitiesThe new economic team with Minister of Strategy and Finance Yoon Jeung-hyun at the helm has taken off with the emergency lights flashing.
To further underscore the urgency of the situation, President Lee Myung-bak approved Yoon’s appointment last Monday following legislative confirmation by e-mail.
The gesture states clearly that there is no time to waste on formalities. The economic crisis is too dire.
In his first press briefing, Yoon was first among the country’s top government officials to admit the economy will contract by 2 percent this year due to the double whammy of weakened consumption and demand for exports.
The government had initially projected a year-on-year economic growth of 3 percent. He also offered a depressing forecast that sees a loss of 200,000 jobs by year-end, compared to earlier predictions of 100,000 new jobs.
Instead of offering a placebo, Yoon warned that the economic calamity was far more serious and much broader than initially thought.
But economic indices can’t improve just because new experts step in. The solutions offered by Yoon’s team are no more creative than their predecessors’. This is because there simply is no panacea for the current economic plight.
At times like this, it’s best to keep to economic basics.
The government should muster efforts to cushion the cascade of job losses during this period. It needs to raise a supplementary budget worth more than 15 trillion won and expedite government spending.
No matter how painful it is, the government must ensure that ailing banks close down and carry out corporate restructuring.
Yoon told the press he can’t wave a magic wand and make the turmoil go away, but what he can do is learn from his predecessors.
Former Minister Kang Man-soo aimed at hitting home runs from the beginning, offering a rosy outlook and ambitious projects.
Anxiety and eagerness to sustain exports confused the foreign exchange policy. When the odds are bad, bunting can sometimes be the best strategy to keep a ball game going.
The same strategy can be applied during unprecedented economic times like these.
“I won’t start anything I cannot finish. I will come up with the appropriate policies at the right time with the right intensity.” Yoon said.
We hope his strategy succeeds.