Salvation comes from within

Korea is mired in another crisis, even though, on the face of things, the economy doesn’t seem to have been as badly shaken as was the case during previous financial crises led by external shocks. We haven’t yet seen a chain of corporate bankruptcies or any financial breakdown. The economy is still generating growth, and the streets have not been overrun by the homeless and jobless. But we’re facing a critical period because of the bleak state of things to come.

Various sectors of the economy are losing steam and vitality amid the protracted slowdown. Exports have slowed, and domestic spending remains stubbornly depressed. The economy is expected to generate growth of less than 3 percent this year. The public is anxious about what the future holds in store due to reduced levels of income and falling home values. The slowdown will most likely become entrenched if consumers keep their wallets closed.

However, this does not mean that there is no way out. The JoongAng Ilbo campaigned for a national agenda to revive domestic demand and jobs earlier this year based on the belief that the economy could no longer depend on exports led by large manufacturers. Unlike in the past, rising exports do not necessarily equate to more jobs. Under such gloomy circumstances, we must drum up more demand at home to spur job creation and improve income levels in order to get the economy back on the path of growth.

The JoongAng Ilbo, together with the Korea Economic Research Institute (KERI), has renewed its campaign to bolster domestic demand in hopes of finding a way to break the cycle of low growth and prepare for the future. KERI researcher Lee Tae-kyu suggested that Korea also target middle-class Chinese, Japanese and Southeast Asian consumers to create more demand for domestic goods.

Meanwhile, the domestic market needs sweeping deregulation. The tourism, wholesale and retail industries as well as the medical, legal, education and IT industries should be opened further to give more opportunities to those desperately in need of jobs. Presidential candidates and political parties all promise to deliver jobs to the needy, but their rhetoric only goes so far as it is often based on recycled ideas lacking inspiration or practical benefits.

The country’s economic future hinges on bolstering domestic demand, which is the key to growth. Presidential contenders should present exact numbers and detailed plans for further market liberalization to give the market a shot in the arm and increase jobs.