Scoring the Korean economyLately, governments around the world have received progress reports - an evaluation of each country’s efforts to overcome the global financial crisis six years on.
The country that is most pleased with its report card is the United States. It has straight As, at least in terms of outcome. Various economic indicators are reminding us of the U.S. economy’s heyday.
“The U.S. is back in the driver’s seat of the global economy after 15 years of watching China and emerging markets taking the lead,” said Bloomberg News.
Japan and Europe’s grades are mostly Cs and Ds. Having poured in an astronomical amount of money, the Japanese and European economies are stuck in deflation and would not get high marks.
China has had its ups and downs. It was the sole savior of the global economy when it fell into the worst slump since the Great Depression. Some developing countries claimed that they should follow the Chinese growth model of “Beijing Consensus” rather than the “Washington Consensus,” the free-market economic policy plan that became the standard of U.S. capitalism. However, China’s growth is showing an apparent slowdown, and China is not guaranteed an easy A. Talks of Beijing Consensus have disappeared on Wall Street. Russia and Brazil are struggling.
For the last six years, countries around the world have been given the same amount of time, and they all used it differently. Many countries failed to push for economic recovery decisively and consistently. Europe and Japan were reluctant and did not implement market-boosting measures on time. China was slow to promote structural reform, and Russia and Brazil failed to change their resources-dependent economic structure.
Leadership is especially important during times of crisis. President Barack Obama’s bold fiscal spending prevented the economy from worsening and defended the Fed from attacks of the conservatives to help restrict an interest rate increase.
What’s more impressive is the promotion of honest and transparent policies. In the State of the Union address, he proposed to find tax loopholes in the top 1 percent of wealthiest households and spend the money on child care and college education. His ideas are not likely to be realized as the Republican Party dominates both houses in Congress.
However, the president’s public declaration of a tax increase for the rich clearly shows the direction of the administration. Voters will make a choice in the election whether they support his idea or not, and the policies that are created through the process will have justification and momentum.
How about the Korean economy’s report card for the past six years? One thing is clear: honesty, transparency and leadership have been lacking.
*The author is the New York correspondent of the JoongAng Ilbo.
JoongAng Ilbo, Jan. 27, Page 30
by LEE SANG-RYEOL