IGE puts balance ahead of ideologyThe Institute for Global Economics (IGE) last month celebrated its 20th anniversary. When Sakong Il opened the institute in 1993, there were many misunderstandings. As a former high-ranking government official, the institute was considered his pet project. Some considered it a stepping stone to his entrance into politics.
However, the institute has today become a platform where numerous scholars, government officials and other leading figures around the globe gather and hold various heated debates about international politics and economic issues.
Sakong is today considered a success for how he has brought together leaders, experts and corporate officials from home and abroad through his vast human network.
A former Blue House senior economist, finance minister, diplomat and Korea University professor, Sakong, who was also the head of the G-20 Seoul Summit preparation organization between 2009 and 2011, shared his views with the JoongAng Ilbo.
The first thing he stressed was that the Park Geun-hye economic team needs to be more aggressive in communicating with the public. He said that to solve various problems that prevent Korea from advancing economically, the government needs to hold bold discussions with those who oppose it and ultimately create a social agreement that would help it pursue its goals.
Q. What does the economy need to gain momentum?
A. The first thing that needs to be solved is creating a favorable business environment. With the growth of globalization, companies easily move across borders and jobs are affected by it. A business-friendly environment means friendly jobs.
The second issue that needs to be addressed is education reform. A nation’s competitiveness is determined by its education level. We need to reform education to help create higher labor productivity.
Thirdly, we need to secure the social safety net. Because of globalization, the gap between the rich and the poor is getting wider. A social safety net is crucial so that people who have failed [in business] can once again make a challenge.
How can a country create such a business-friendly environment?
The government needs to be bold in lifting regulations in areas that local and foreign companies want to invest in. The area that is urgent to us is the service industry, including medicine and tourism. Once regulations are lifted both domestic and foreign companies will increase their investment and that will lead to creating better jobs.
But there’s strong social resistance to allowing for-profit hospitals.
The government economic team, including the Vice Prime Minister Hyun Oh-seok, needs to convince the public through a variety of means, including televised debate. They need to explain the current status and the national strategy using various media, including broadcast television shows. They need to be aggressive in discussing the issue with those who oppose them and, in the end, let the people decide.
There haven’t been discussions like that seen under the current government.
That shouldn’t be so. The government economic team needs to discuss and argue face to face with the people that oppose them. The government needs to make public all the data it has. The shortcut for making successful policy is reducing social conflict.
It seems bureaucrats have a preference for regulation
The president needs to personally deal with the easing of regulations on the service industry. If the president herself presents the overview and makes the plans, public servant organizations will automatically follow.
President Park has been assertive with her global diplomatic activities.
Attending numerous global events that heads of state attend, such as the G-20 summit, in her first year in office is a good opportunity. The fact that Park is a female president also works in her favor. However, when meeting other heads of state, she should not focus too much on domestic issues. Due to being too ambitious with promotional activities, ministers and top aides [of the president] have the tendency to create speeches and discussion points that are interesting only to Koreans. It is best that she doesn’t mention “creative economy.” Instead, she should talk about global issues.
Will foreign heads of states be interested?
Nowadays there isn’t any global leader who stands out. The U.S. President Barack Obama and the Chinese Premiere Xi Jinping are both preoccupied with issues happening in their own countries. At the same time, the two are aware of each other to the point that the issues each brings up are vetoed by the other.
It seems global meetings, such as the G-20 summit, are turning into a diplomatic stage for bilateral discussions rather than multilateral discussions.
That is true. Instead of discussing common issues, it seems the discussions center on issues that are in the interest of two countries. That is because there is no leading figure who can address a global agenda or try to get countries to reach an agreement. If President Park were to raise a common agenda [at such meetings] instead of promoting Korea, she would surely be welcomed.
What kind of effect would it have?
Like when the former British Prime Minister Gordon Brown demanded a new financial order after the 2008 global crisis, the national status will be heightened if President Park suggested an agenda that the global community could act upon. There is no better way to enhance the nation’s prestige.
What are your thoughts when looking back on 20 years of IGE?
The IGE got a lot of attention the moment it was created. A lot of people from the media, academia and even government officials attended our lectures and discussions. We have been successful because we have remained the same as we started.
It seems there were a lot of misunderstandings at the beginning.
So it was. With the news that a former senior Blue House economist and finance minister was opening an institute, there were people who considered it as a personal project. Even some believed that the institute was a front for my entry into politics.
Was there interest voiced from political circles?
There were some, but I rejected all of them. I have an ethic as a former high-ranking government official. I want to work for the public’s benefit.
It seems the IGE is the most active research institute created by a former high-ranking official.
If I created the institute as a stepping-stone into politics, the institute wouldn’t have lasted long. Additionally it would have lost its independence if I received funding from companies or the government using my past status as a Blue House economist and finance minister.
What kind of independence do you mean?
If you look at the people invited to IGE events, there are several people from Korea and abroad whose views are progressive. I take pride that the IGE is an open space [for different political or social views]. In fact there are numerous liberal scholars, including the Nobel laureate Joseph Stiglitz of Columbia University, that were invited to IGE events.
Byun Hyung-yoon, a former Seoul National University professor who stresses balance over efficiency [considered a liberal position], is one such liberal scholar from Korea who attended IGE events.
What do you think is the secret for how the institute has been able to last so long?
As we try balancing expert views on the latest trends and issues, people responded and we started to grow. Additionally famous scholars and leading figures from overseas have responded with enthusiasm to our invitations.
BY KANG NAM-GYU [firstname.lastname@example.org]
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