Lots of blame for spiraling prices

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Lots of blame for spiraling prices

Over the Chuseok holiday, every Korean must have felt a keen sense of frustration at skyrocketing prices. The prices of fruits and vegetables rose by a whopping 20 to 40 percent compared to last year, and gasoline prices, which had slowed down a bit thanks to government controls, were on an upward spiral again. Those who went to their hometowns with their own cars during the holidays were shocked at the out-of-control gas prices. The price per liter has topped 2,000 won ($1.85), the Maginot Line set by the government, and it hit 2,200 won per liter in Seoul, a 10 percent increase in just a few days.

The appearance of Minister of Knowledge Economy Choi Joong-kyung - who had declared a “war on oil prices” - on television only made citizens wear a bitter smile. People were awakened to frustrating statistics that show that the Consumer Price Index soared by 5.3 percent last month, the steepest hike in three years.

The talk of the town during the holiday was centered on the skyrocketing prices in Seoul and the rest of Korea. Politicians must have heard many complaints from their constituents - ranging from “The crops have failed this year” (farmers) to “My business is screwed up” (self-employed businessmen) to “I am scared to go shopping” (housewives). These complaints are not overstated, but real.

The sharp price increases result from many factors, including a steep rise in petroleum and grain prices in international commodity markets. Domestically, the unprecedented deterioration of weather conditions this summer has also contributed to the remarkable price increases in agro-fishery products. But the government is not immune from culpability for failing to control inflation, particularly because the Lee Myung-bak administration has made much ado about price control; it even forced the private sector - particularly big companies - to restrain price increases. The government must come up with a new solution to curb runaway inflation.

The issue of inflation is not confined to the economic field alone. The surprising ascent of Ahn Chul-soo, a doctor-turned-software mogul, over Korea’s political scene can be explained by economic reasons as well: A tough life aggravates people’s abhorrence of politics. If politicians fail to handle voters’ livelihoods well, it exacerbates their cynicism about politics. A mentality looking for hope and alternatives creates things like the dramatic rise of Ahn’s popularity. Public sentiment during the Chuseok holiday confirms the simple fact that prices are closely interconnected with politics.
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