How to keep Korea growing
South Korea’s achievements over the last 70 years have made it seventh in the world in terms of export turnover and 13th in economic size. It remains an exceptional model for a rags-to-riches transition into an industrial powerhouse, from a country that was divided after 35 years of colonial rule and a three-year turbulent ideological war. Politically, the country has established democracy and international recognition. It is also a technology powerhouse.
But a few years ago, Korea’s growth engine showed signs of trouble. Growth in the country’s mainstream industries of IT, shipbuilding, petrochemicals and automobiles slowed significantly. Some were being outperformed by Japanese counterparts backed by a weak yen and Chinese companies that were making fast strides.
Yet there are few signs of promising new industries. While the economy continues to lose steam amid lackluster exports, people who worry about their future restrain themselves from spending. Exports and domestic demand are both sinking as a result. The worsening climate on the external front - a slowing Chinese economy, uncertainties in the eurozone including the Greek problem, and the potential meltdown in emerging economies - also bode badly for the export-reliant Korean economy.
On the 70th anniversary of our liberation, both the state and enterprises must work harder to develop new innovations and hone productivity. The corporate sector must renew entrepreneurship and adventurous spirit through investments. It must stop generating scandals like the family feud at the Lotte Group. It is the only way the corporate sector can gain trust and support from the public and government.
The government also has a lot of work. It must help promote growth and come up with ways to bring about structural improvements in labor and income. The labor and education sector must be reformed to enhance social and economic efficiency. Various regulations that hamper competitiveness and growth must be done away with.
The country’s next 70 years depend on how we cope with current challenges.
JoongAng Ilbo, Aug. 17, Page 30