Focus on fundamentals

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Focus on fundamentals

The nation’s economic team emerged relatively unscathed in the Lee Myung-bak administration’s recent reshuffling.

Three economic-related officials - the heads of the knowledge economy and agriculture ministries as well as the commissioner of the National Tax Service - were replaced.

But the key economy-focused members of the administration stayed put. This group includes the minister of strategy and finance; the minister of land, transport and maritime affairs; and the chairman of the Financial Services Commission. President Lee’s economic confidants such as the chairman of the Presidential Committee on National Competitiveness, the senior presidential secretary for economic affairs and the governor of the Bank of Korea also kept their jobs.

But just because they survived the shake-up, these officials should not for one second think that the administration’s economic team is the best the country has to offer and that the general public approves of their policies and actions.

It’s true that the Korean economy managed to emerge from the global financial crisis faster than many other countries. But most areas of the Korean economy have just barely returned to pre-crisis levels, and the recent growth is largely benefitting exporters and big corporate names. Small companies and everyday workers have been left out in the cold. That’s why most people cannot understand the government’s excitement over its economic accomplishments.

We also have to question the ethics of some ministers, as their policies have been swayed by the government’s populist mentality. They lack vision on sustainable economic growth and conviction on free market principles as they enact plans drawn up by the president and politicians without any questions being asked. Cabinet members may want to cozy up to their bosses, but they must focus on making the lives of people here better rather than attempt to win brownie points with the president.

The economic team now faces a serious test. They must put the fragile economy on a sound track for growth. To do this, they must reexamine the fundamentals of the economy and attempt to close the gap between those who are benefitting from the current situation and those who are not.

The first task should be promoting local consumption, particularly in the services industry. The government has repeatedly said a robust services sector via deregulation is the key to creating new jobs. But it has failed to follow up on its words due to differences among ministers. The economic team must now take action and prove it is capable of tackling the serious tasks at hand.
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