The scales of progress
The administration of President Park Geun-hye, which promised to pave the way to happier lives for the common man, is now in its third year. The ruling party has been in power for eight years, counting the five years under President Lee Myung-bak.
How has the economy improved under conservative government rule for nearly a decade? When applying the highly implausible forecast of 3.1 percent growth for this year and over 5 percent next year, the economy run by the ruling Saenuri Party would have grown 38 percent in total. In the 10 years of liberal governments under Kim Dae-jung and Roh Moo-hyun, the economy grew an accumulated 60 percent. The economy under the conservative party performed just two-thirds of what it achieved under liberals, who are now the main opposition.
Per capita gross domestic product during three years of the incumbent government went up $2,800. When you add the $1,300 rise during the previous government, the total increase is $4,100. Even with a financial crisis that cut more than $4,000 in 1998, per capita income during the 10 years of liberal governments increased by $11,000. Even if the economy grows by more than 5 percent during the remaining two years of President Park’s term, national income growth will stop at just half of what it was under the two liberal governments.
Household income also significantly worsened. Under the eight years of Saenuri Party rule, real household income increased 10 percent, a third of the accumulated economic growth. Under the five years of President Roh, real income grew by 10 percent. In the Kim Dae-jung government, household income, which sharply decreased following the Asian financial crisis of the late 1990s, gained 19 percent during four years. Household debt against disposable assets totaled 97 percent under the Kim Dae-jung government and 105 percent under Roh’s. During the subsequent Lee Myung-bak government, household debt jumped 125 percent, and then 129 percent in the first two years of Park Geun-hye’s. Instead of happier lives, we have gotten poorer and are more in debt.
The fiscal balance also worsened. By 2007, the end of the Roh government, we had a fiscal surplus of 6.8 trillion won ($5.6 billion). In 2015, the fiscal deficit reached 30.1 trillion won. Under the total eight years of Saenuri government, the fiscal deficit amounted to 166 trillion won. National liabilities surged. The share of liabilities against GDP that stood at 18 percent and 29 percent, respectively, by the time Kim and Roh stepped down rose to 32 percent at the end of Lee’s government and 39 percent in 2015. Korea is in danger of losing its prized fiscal integrity.
Exports, which are the primary drivers of the economy, have been sagging for 14 months in a row, suggesting the downturn may not be temporary but structural.
It was not just the economy that retreated under the conservative government. Park championed a trust-building process with North Korea to ensure peace and eventual unification. Many had expected her proposal - following a hard-line position of her predecessor - could offer a breakthrough in inter-Korean relations.
However, North Korea went on testing nuclear bombs and long-range missiles, accusing Seoul of desiring a collapse of North Korea to absorb it. It is wishful thinking to believe that North Korea would come around on its own when our policy on North Korea entirely hinges on the actions of the United States and China.
The Saenuri Party claims the rules of Kim and Roh brought about a “lost decade” for Korea. But from the record of its own governments’ rules, it did worse. Tensions across the border have escalated, and politics as well as society are ridden with incessant conflict and confrontation. How can one describe the 10 years under Lee and Park?
If the years under Kim and Roh were a lost decade, the decade under Lee and Park can be considered years we want to forget. Two years are left in the tenure of Park. Little would change by putting all the blame on the opposition ahead of a general election and a presidential election. Little difference will be made by pleading to the people for support. It would be best if the Park government did nothing in its remaining two years.
Translation by the Korea JoongAng Daily staff
JoongAng Ilbo, March 3, Page 35
The author is a professor at Korea University.
by Jang Ha-sung