What candidates must rememberThe state-run Korea Development Institute delivered a rude awakening for the economy. It revised this year’s economic growth estimate down to 2.2 percent. I had thought such a lackluster growth figure only came from large economies like the United States and Japan.
At the end of last year, the KDI predicted the local economy would expand by 3.8 percent in 2012. Other institutions agreed, with estimates ranging from 3.5 percent to 3.8 percent. It had not been a good number to start with. But over the course of the year, it axed the estimate, bringing it down to 2.5 percent in the third quarter and again cutting it by another 0.3 percentage point in the fourth.
KDI’s outlook for next year is not much better than that - with an estimate of 3 percent in line with a 2.8 percent to 3.2 percent forecast by other institutions. Economic think tanks rarely get their forecasts right and we’ll probably end up seeing a humbling number - even in the 1 percent range - by the end of next year.
Growing up in a period when the industrialized economy ran at full steam with persistent double-digit growth, it took some time to get used to a single-digit growth rate. But it may not be long before we see the economy recede. What a dramatic course of the economy we have seen in the span of a few decades!
Looking back, we were lucky during our industrialization. The global economy had been booming and we scored just by playing diligently. But the global economy is in the opposite state today. An export-reliant economy has few places to turn with the euro zone in dire straits, ridden with debt and fiscal troubles, and the United States and China both struggling.
Re-elected U.S. President Barack Obama is intent on aiding the economy through quantitative actions, which would likely keep the U.S. dollar weak against the Korean won. The Chinese government under Xi Jinping’s new leadership vowed to redirect centralized policy that largely enriched the nation while leaving out the rest of the population so that prosperity can trickle down to ordinary citizens and help stimulate domestic demand.
If it succeeds, an infinite consumer market would be born in the world’s most populous country. But it remains doubtful whether an enlarged consumption market in China can really benefit Korean companies that mostly sell capital and intermediary goods to the world’s largest industrial powerhouse. It won’t be easy to make money in both manufacturing and service markets.
A new government will be in power in Korea as well next year. It will be either Park Geun-hye of the ruling Saenuri Party or Moon Jae-in of the opposition Democratic United Party. From the look of the platforms of both camps, the presidential hopefuls have big spending plans even though income is expected to sharply fall. While fighting like cat and dog over past issues, both the conservative and liberal camps agree on the common theme of enhancing social welfare. Park says we are on the brink of a welfare expansionary period.
Under promises of the campaigners, child care upon birth and schooling will be financed by the state. College tuition fees will be cut by half and our late-age comforts will also be provided by the state. When we fall ill, the state again will take care of us. Regardless of who becomes the president, we are promised of a heaven on earth. The state will pay and answer for our security and comforts. The people have nothing to worry about.
The problem is that few buy this story. Even a merchant in a local street market laughs at the campaign promises. One reader wrote to our paper expressing how angry he is at the condescending attitude by politicians who all promise to wipe tears off our faces. “They underestimate the people. We are very strong and do not weep. The politicians are in fact rousing people to place blame on others for their troubles.”
Do we actually need a lovey-dovey, all-sacrificing motherly government? Until this day, the Korean people not once whined to the government for food and help. We are unfamiliar with this sudden shower of attention and generosity from politicians.
At times of crisis and pressure, Koreans tend to be more productive and focused. When someone suggested that we donate gold to help the country battle with its currency crisis, Koreans from small children to senior citizens formed long lines across the nation to hand in their gold spoons and rings. I don’t understand where politicians got the idea that they need to pamper the people, whose inner strength awes and is envied by others around the world.
Moreover, they have neither the money nor the capability to support the people in the first place. Of course, the state allowances and subsidies for child care would help households to a considerable degree.
But what the people really want to know is what they can do to make this country and economy bounce back.
Once directed and given a goal, Koreans dash forward. But we have lost track because of sudden changes to the rules. What we want to hear from our next president is not talk of welfare heaven or past wrongdoings. We want to hear accurate assessments of today’s problems and what needs to be done.
Then we want to hear a confident voice from the future president that our future nevertheless will be bright if we all pull together.
The people are strong and ready. They just need an equally worthy leader.
* The author is an editorial writer of the JoongAng Ilbo.
by Yang Sunny