Park needs big-picture agenda

President Park Geun-hye may have received just a 60 percent approval rating from the public on her first six months in office, but that is still better than her recent predecessors. Having done relatively well, Park can now push ahead with her agenda more aggressively. Yet people feel there is something wrong, even a sense of anxiety, about her government.

These worries are mostly on the economic front. The president has made an impressive debut on the global stage and demonstrated resolute leadership on North Korean affairs. But people are dissatisfied with the economy. Regardless of achievements on foreign policy and security, people will be frustrated with the government if the economy is troubled.

It would be a miracle, of course, for the economy to turn around suddenly just half a year into a new administration. President Park also asked for patience “because the government is doing what it can and expects results during the second half.” The president herself is showing restlessness about the pace of recovery in the economy. She ordered the governing priority for the rest of the year to be on reviving the economy and is whipping economy-related offices. She proposed to the opposition party that she was ready to meet representatives on issues related to public welfare and invited the owners of chaebol groups for discussions over a meal. Such interest and will from the country’s executives should raise hopes that the economy will get better. But somehow concerns about the economy continue to drown out people’s hopes.

The government for the last six months has trotted out a series of measures to boost the economy. It introduced supplementary budget and actions to stimulate the real estate market, corporate investment, small- and mid-sized industries, and technology and venture start-ups. Yet corporate investment has fallen and consumer spending remains stubbornly sluggish. The economy edged up more than 1 percent in the April-June period from the previous quarter, after muddling along in the zero range for eight consecutive quarters. But the pickup merely came from brisk overseas sales by major exporters. There are few signs of recovery elsewhere in the economy.

There may be a mixture of factors behind this malaise. The government stimuli prescriptions may not have been strong enough and there could have been lack of policy means. Or the global economic recovery could be too slow to help. But the blow may have come from within. The government carried out a number of policies that dampened the effects of and worked against its own stimuli. Under the banner of heightened economic justice and equality, the authorities introduced a handful of regulations that dampen corporate appetites and activities while enhancing auditing to boost tax revenue. The government was self-contradictory, demanding the corporate sector increase investment while slapping them with various new regulations that hindered investment.

What’s worrisome is that there are few signs that these incongruities in policy-making and execution will improve. The president ordered the deputy prime minister on the economy to take on more responsibly as the control tower on economic policies, but that is not possible unless there is a major change in decision-making procedures. The deputy prime minister neither has the authority to coordinate and push ahead with policies on his own, nor an economic vision or blueprint. The government has never come up with a visionary, macroeconomic agenda. The only goal it spoke of was a 70 percent employment rate, but that’s just a number, unaccompanied by a specific action plan to achieve it. People’s lives get better when the economy grows and boosts income. But without any goal or blueprint to stimulate growth, neither the economy nor people’s lives can improve much. Due to the lack of macroeconomic goals, all the policies the government keeps generating only come up empty, creating self-defeating side effects. The promises of economic recovery are in vain.

The economy runs on macro directions and micro actions. The macroeconomic agenda for financial markets, public finance and international accounts must work concordantly with micro policies of industrial support, fair practices and taxes. There must be a common and consistent direction in order to prevent policies from contradicting each other and to maximize their productiveness. That direction is the vision and the blueprint for economic growth.

But the incumbent government lacks such a vision. The president is merely preoccupied with micro policy details and her demands for results are only fanning confusion and uncertainty in policies. She says a tax hike or breaking her campaign promises on welfare is out of the question. She then asks the government to rework tax policies to increase revenue so she can fulfill her welfare policies amid public resistance. She pushes the government to come up with a radical plan to stabilize the housing market. Presidential aides and cabinet members do not argue, and public officials have to come up with measures to satisfy her demands. This is why the government’s actions do not work well on the real economy.

Without changing this mind-set on the economy and policy making, we cannot expect meaningful economic progress. If the government is eager and sincere to save the economy, it first should set a direction and goal. Then it should map out policies and means to achieve those goals. The president should order her government to come up with big-picture solutions for the economy. The question is, are there any candidates with such boldness and foresight in her government?

*The author is an editorial writer of the JoongAng Ilbo.

by Kim Jong-soo