No time for celebratingThe country’s trade volume has topped $1 trillion. Only the U.S., Germany, China, Japan, France, the U.K., the Netherlands and Italy have achieved this milestone.Mainstay exports over the years have evolved from wigs made from human hair and tungsten to state-of-the-art semiconductors, automobiles and smartphones. A tiny periphery nation has transformed into an industrial powerhouse through liberalization and fostering labor. And Korea has entered a new stage in trade history through the impetus of free trade agreements with major markets like the United States and the European Union.
Exports remain the major driver of the Korean economy. We have weathered external risks and other challenges through expanded exports. Exporters paved the way and found new trade opportunities in the Middle East, China, and Eastern Europe. Korean companies, now armed with international competitiveness, stand as major players in the global market. But there is a shadow to every light.
While exports grow by double digits in a year, domestic consumption and capital investment - the other factors moving the economy forward - have been increasing at a snail’s pace. The added value and benefits from economic growth went mostly to large enterprises, aggravating social polarization. Behind the trophy of our trade milestone is jobless growth and sluggish domestic consumption.
But exports and domestic consumption can grow together if start to make some much-needed changes. With few resources, Korea is forced to run its economy by relying on exports, and exporters now have their eyes set on the $2 trillion mark.But a trade structure that has been centered on commodities should shift its focus to services. And we cannot join the ranks of advanced economies without balanced growth in exports and domestic consumption alike.
To enlarge the local market and the export of services, liberalization and deregulation are necessary. The services sector should learn from the aggressive mindset and openness of exporters. If the medical, tourism and education sectors gain in competitiveness and efficacy, there will be an enormous gain in export revenue. If the service sector remains overly focused on the domestic market, the Korean economy has no future. We must stop dilly-dallying, recognize the challenges we face and take action.