[Viewpoint] A perfect launchWith the 2010 Winter Olympics just about a month away, the media will likely start reporting that Korea has few chances to bring home medals.
Because of this long-running biased coverage, my generation grew up thinking that wrestling was the highlight of the Summer Olympic Games. On the same token, today’s youth consider short track speed skating as the main event of the Winter Olympic Games. The traditionally poor performance by Korean athletes in the actual highlights of the Olympics - track for the Summer Games and skiing for the Winter Games - might be closely related on some level to this biased coverage.
Yet this year’s winter Olympics will be different.
Koreans are cheering for figure skating phenomenon Kim Yu-na, and the movie “Take Off” has garnered support for the national ski jumping team.
Ski jumping is an interesting event. If the wind is blowing in the right direction, an athlete can fly 140 meters (459 feet). If the jumper is flying against the wind, however, he might barely catch any air. So a gold medalist might not have a very good record overall, and even a mediocre participant can jump farther than a world champion if he is lucky on the wind side of the equation.
The Korean government’s economic policy resembles ski jumping. The Lee Myung-bak administration approached the ramp with an overall economic plan. But it did not take into account changes in economic trends, which in this case can be seen as a shift in the direction and strength of the wind.
It decried the actions of the last administration and made unreasonable attempts to prove itself a much superior successor.
The economic growth rate, which had been around 5 percent, dropped to 2.2 percent in 2008, and last year’s growth is estimated to have been flat.
Of course, the government is not entirely responsible for such miserable records. We are going through what is considered the worst global economic crisis since World War II. Ironically, however, this external handicap took the political pressure off the government for failing to accomplish its campaign promises. Moreover, the government is boasting that the country is posting the fastest economic recovery among the members of the Organization for Economic Cooperation and Development. President Lee’s soaring approval ratings as of late are based on this view.
Of course, the government does deserve a pat on the back. It implemented drastic financial policies in a timely, appropriate fashion. Its prompt diplomatic efforts greatly contributed to the stabilization of the nation’s finance structure and currency.
But the government can’t claim all the credit. Setting the direction of economic policy for 2009 was not exactly a difficult challenge. As the world was battling the unprecedented economic slump, Korea just followed the measures taken by developed countries to prop up their economies. The government should not be given credit for making wise policy decisions, but rather for efficiently implementing a given set of policies.
The ongoing restructuring efforts of large conglomerates since the 1997 foreign currency crisis made the most crucial contribution to the Korean economy’s rapid recovery from the most recent global meltdown. If these conglomerates had not pursued low debt ratios, risk-adverse investment and lean management, Korea would have suffered great pain in the crisis.
Many economists think that the changed management style at large corporations is the cause of the noticeable drop in the economic growth rate in the last decade. And influential commentators claim that it is a result of a conspiracy created by Wall Street in collaboration with the International Monetary Fund. Such perspectives should be reevaluated based on our recent experiences. It is high time we get over being nostalgic about the rapid economic growth of the past and appreciate the wisdom of slowing down and building substantiality to ensure a safe voyage.
Now, the government is gearing up for its second jump. The wind has changed direction and is now blowing to our advantage. This time, however, a more challenging question lies ahead. The core of the economic forecast for 2010 is that the recovery of developed countries and emerging economies will be differentiated. There should therefore be another exit strategy than the government’s original plan of consulting with developed nations. These countries’ growing government debts can blow up any time, while emerging economies could see problems tied to with low interest rates combined with high growth rates.
In ski jumping, the magical moment comes when taking off. If you jump too early, you won’t fly far. If you are too late, you can botch the landing. The government needs to abandon its excessive ambition and time its launch perfectly to display its true abilities.
*The writer is a professor of economics at Sogang University.
Translation by the JoongAng Daily staff.
by Song E-young