[Viewpoint] We need a clear economic leaderIn what Mexican President Felipe Calderon, host of the Group of 20 summit meeting at the Pacific resort town of Los Cabos, Mexico, described as an “extraordinary” move, emerging economies chipped in as much as $456 billion to supplement the IMF’s reserves to contain fallout from the European crisis. The leaders of Brics nations - Brazil, Russia, India, China and South Africa - as well as Columbia, pledged contributions to help recapitalize the International Monetary Fund.
South Africa offered $2 billion and Columbia $1.5 billion. The sum may look humble compared with Korea’s pledged $15 billion, but it actually is quite meaningful when considering their economic size. South Africa’s economy is just one-third of ours. Its borrowing costs went up after suffering a cut in sovereign credit rating due to the crisis in the euro zone. Columbia is even smaller than South Africa.
Yet even smaller Mediterranean island countries Cyprus and Malta pitched in $6 million and $3 million, respectively, to pump up the emergency firewall at the international lender. The IMF raised reserves to nearly half-a-trillion dollars, doubling its current lending capacity, despite little help from the United States and Canada. “Countries large and small have rallied to our call for action,” said IMF Managing Director Christine Lagarde.
The message is clear. The times are so critical as to demand a concerted effort from everyone. The crisis in the euro zone could escalate to a global scale. Whether it is triggered by Greece, Spain or Italy, the contagious effect could spread out across the globe.
German Chancellor Angela Merkel bluntly told the Greeks that they need to elect a new government that stands by the country’s vows to international creditors ahead of their vote on Sunday for the second time. Officials at the Ministry of Strategy and Finance grumbled that they stayed up all night for Greek’s election results even though they didn’t do the same for the legislative election in April in their own country. President Lee Myung-bak was briefed about the Greek election developments during his flight to Los Cabos. As elections in France and Greek underscored, politics can be governed by economic circumstances.
But Korean politics may be suffering from a “Galapagos spell,” strangely isolated from economic disasters and state of urgency at home and abroad, even as the economy is largely driven by external trade. The economy has slowed in the first half and isn’t likely to pick up in the second half.
But politicians are leaving the economic work entirely up to the outgoing government. Only a few bring up the crisis in Europe, mainly to argue for opening the National Assembly session or to criticize the ratification of the Korea-U.S. free trade agreement as a premature step.
We may not expect so much from politicians. But at least candidates running for president should be different. The crisis in the euro zone is expected to drag on for many years. President Lee’s term ends on Feb. 24. The incoming president would have to navigate the economy amidst turbulent weather. It is why presidential candidates must speak about the economy and what they would do about it.
With the election just six months ahead, we hear nothing. The candidates remain silent with their parties preoccupied with election formalities. The ruling Saenuri Party is busy with a factional dispute over the primary rules as some demand an open primary. The main opposition is more or less threatening hugely popular Ahn Cheol-soo, dean of a Seoul National University graduate school, to announce his plans for the presidential race.
Is it because candidates have so much faith in the incumbent president in terms of crisis management even though they do not approve of him? Do they have so much confidence in the government and officials to do their job well regardless of the election? Or are they all introverted and self-assured, plainly uninterested in what goes on in the world? Or do I just worry too much?
* The author is the deputy editor of politics and international news of the JoongAng Ilbo.
by Ko Jung-ae