Challenges for 2016

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Challenges for 2016

This year started with two global events particularly meaningful to Korea. First, the Chinese economy’s growth dropped below 7 percent, a development that sent shock waves around the world. Second, the theme of this year’s World Economic Forum in Davos, Switzerland, was the “fourth industrial revolution.”

The phrase “xin chang tai,” or “new normal,” a commonly used description of China’s evolution into slower growth, has become part of our lexicon. In fact, the new normal can be seen as a necessary transition for the sake of sustaining the Chinese economy through a rebalancing between domestic consumption and exports, between manufacturing industries and service industries, and between corporate investment and private consumption. Slower growth in the Chinese economy is widely feared, but it can also be seen as desirable for the global economy in the long run.

Still, slower Chinese growth impacted the global economy with greater strength than expected, as seen in the plunges of international oil prices and major raw material prices, and the world once again became aware of the clout of the Chinese economy.

Ironically, China reconfirmed its expanded influence through slower growth. On the more positive side, it will likely raise its voice in all international arenas. With the Asia Infrastructure Investment Bank, which was recently launched with global support, China’s leadership became confident that it could establish a multilateral global organization without American support or participation.

In order to realize China’s dream to restore its glory and to create a new global order with it at the center, Beijing has been promoting specific policies recently.

It is pushing forward the “One Belt, One Road” initiative to link Central Asia and Europe by land and to link Southeast Asia, India, the Middle East, Africa and Europe through maritime routes. The strategy seeks to link 60 countries with 60 percent of the global population to a Chinese economic community. President Xi Jinping, following a visit to Pakistan last April, visited Saudi Arabia, Egypt and Iran recently to strike various deals.

As China pushes forward various strategies to realize its dream, we will face many new opportunities as well as many geopolitical challenges. Therefore, we need to concentrate in order to maintain our economic superiority and bolster our soft power to achieve balanced diplomacy with our neighbors and the United States.

The fourth industrial revolution is being triggered by rapid advancements of technology in artificial intelligence, robotics, 3-D printing, big data, the Internet of Things and biotechnology. A seismic change in jobs sparked by the revolution, in particular, is what we must pay attention to.

Experts say students in elementary school today will eventually work in professions that currently do not exist - possibly 70 percent of them. That illustrates the importance of a flexible labor market and educational reform to develop the kind of creative manpower needed in an era of rapid change and new technologies.

As many existing jobs are destined to disappear, we must create more new jobs. But vested interests are trying to protect the jobs that exist today, which will ultimately do damage to the majority of the workforce, companies and the national economy. We must pay heed to the old saying that we must protect the workers, not the jobs.

Needless to say, education reform requires a drastic shift in our thinking. Comprehensive education reform to provide lifetime education and training, a system to offer retraining, education methods focused on creativity and content appropriate for a new era of convergence between technology and the humanities should be pushed forward continuously even in the next administration. Without proper education, we cannot produce the workforce needed in the new era, and it is also impossible to create new jobs sufficiently.

Most of the reform measures, however, have to go through the National Assembly, and understanding and cooperation by the politicians are vital. That is why political reform is another urgent task that should not be delayed.

Lawmakers must immediately throw away the recent amendment to the National Assembly Act that requires an artificial type of compromise to pass any legislation that is remotely controversial. More professionals must be allowed to enter the National Assembly by redistricting and revision of the election methods.

The current five-year single-term presidency, too, must be changed in order to create conditions in which an administration can establish a proper long-term national agenda and push it forward beyond a few years.

It is also urgent to normalize the functions of the government. After ministries moved to Sejong City, unnecessary administrative costs and inefficiencies grew. We need a concrete plan to reduce them.

If the National Assembly cannot relocate to Sejong City, all standing committees must be able to hold their meetings there. The administration also must devise a plan to maximize the hours of ministers and vice ministers doing their job in Sejong. Furthermore, we must never forget that returning the right to make appointments to each minister is the key to improving administrative efficiency.

Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, Jan 25, Page 31

*The author, a former finance minister, is an adviser to the JoongAng Ilbo.

by Sakong Il
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