[Outlook] It’s time for economic triage

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[Outlook] It’s time for economic triage

Napoleon owed a debt of gratitude to Dominique Jean Larrey, a French surgeon in Napoleon’s army. He served Napoleon on countless battlefields from Egypt to Waterloo. He performed up to 200 operations a day during the expedition to Russia.

Larrey and his ambulance corps devoted themselves to helping Napoleon win victory after victory.

In battle, wounded soldiers crowd in all at the same time. The French word “triage,” an international medical term, refers to the process of prioritizing patients based on the severity of their condition in a mass-casualty setting, and it was systematized by Larrey.

The important task facing military surgeons was to divide victims into three basic categories: those who are likely to live, regardless of what care they receive; those who are likely to die, regardless of what care they receive, and those for whom immediate care might make a positive difference in the outcome.

Another name for market competition is economic war. These wars are waged worldwide with weapons such as quality and price rather than arms.

A sign on the road ahead warns us that the current economic war is likely to lead to the rise of protectionism and commercial disputes as foolish and narrow-minded national leaders succumb to the political expedience of populism.

Amid this economic gloom, it’s too dark to see what is right under our noses. The economic situation requires radical reform of the Korean economy.

Sustainable growth is possible only when limited available resources are reallocated from inefficient sectors to efficient ones, and when infrastructure is ceaselessly built to help new companies stand on their own feet.

If only a few wounded soldiers are carried into the field hospital despite the fierce battle, there would have to be some problem with the medical evacuation team.

The fact is we are now in the midst of a worldwide depression through which no one can see.

The world’s leading financial companies on Wall Street, now humiliated through their own cleverness, fall one after another, and large companies are on the verge of bankruptcy.

A majority of countries such as France and Germany are sitting around on their hands despite America encouraging global cooperation and striving hard to put out the fire.

They are watching for a chance at a free ride, while America is unveiling a series of economic stimulus measures.

Currently, we are not engaged in a distant war, but a fierce struggle for survival. We should bear in mind that we are not looking at another person’s trouble with indifference, but are being pressed by urgent business.

In this regard, it is necessary that we join together to tackle our shared problems. We cannot remain idle until we have developed a solution.

Although we are confronted with an economic meltdown very different from the financial crisis a decade ago, it is a constant truth that we should continue to place great emphasis on the radical reform of the national economy.

In the wake of the Asian financial crisis, an enduring restructuring effort has been a recurring prerequisite to accomplishing our tasks: to strengthen corporate financial structures and help Korean products secure global positions.

We hear media reports that Japanese industries such as automobiles and electronics are undergoing intensive restructuring programs despite their global competitiveness.

In contrast, Korea seems comparatively quiet. Is this because the high exchange rates for the won across the world are dulling the pain of the downturn?

Many people across our country are assuming a wait-and-see attitude toward the world economy. In addition, the government is sending frenzied signals about implementing measures to prevent corporate bankruptcies and restructuring at the same time, due to its concerns about a surge in mass unemployment.

Financial companies seem to be loose in setting ratings for their loan assets, on the pretext that they are forced to maintain a BIS capital adequacy ratio as a magical standard affecting their very existence as independent entities.

Some companies evade restructuring by utilizing outside forces. Others seek to escape from reality by taking legal action or using overseas projects that are likely to create no tangible benefits for the national economy as a shield.

Such companies indulging in petty tactics should see great disadvantages in their business dealings through lower credit ratings. They should also be forced to disclose their outside influences.

Bond finance companies should assume a firm attitude towards faltering enterprises, like a general hospital sending away a patient with a feigned illness.

Restructuring should be conducted in earnest, like the field hospitals that helped strengthen Napoleon’s armies, to build a sound and healthy Korean economy.

The writer is chairman of the Financial Institutions’ Consolidation Arbitration Committee. Translation by the JoongAng Daily staff.

by Kim Pyung-joo
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