Who takes charge of the economy?Korea’s state affairs are hanging in limbo due to the influence-peddling scandal with Choi Soon-sil. The economy, meanwhile, is sinking fast. Production, consumption and investment all retreated. Private economic think tanks predict a recession streak until the second quarter of next year. Exports have been falling over the last two years.
The external front is no better. The international trade and financial markets are bracing for an upheaval in the aftermath of the U.S. presidential election. Republican candidate Donald Trump warned of a shockwave ten times bigger than the British vote to leave the European Union should he win. The U.S. Federal Reserve is readying for a lift-off in interest rates next month.
All these factors could deal a heavy blow to the fragile Korean economy. The country could face a crisis like in the late 1990s when it had to seek an international bailout should foreign exchange and financial markets give way.
Even as the Korean ship is looking straight at a mega storm, there is no one at the wheel. The new deputy prime minister for the economy has been appointed, but he cannot take up the role because the legislature dominated by the opposition will most likely not endorse him even after hearings. The Ministry of Strategy and Finance cannot make any decisions serving two ministers — incumbent Yoo Il-ho and newly-named Yim Jong-yong. It cannot disobey the outgoing Yoo and at the same time it must coordinate with the new boss-in-waiting.
The economy can no longer afford a further stalemate. It desperately needs legislative stamping on next year’s budget of 400 trillion won ($352.3 billion) and revised tax code. The government also must address volatility in the foreign exchange market, the ticking bomb of household debt and urgent cleanup of the troubled industrial sector.
Politicians must yield to prevent a crisis on the economic front. They must endorse the finance minister or name another economic chief if they are unhappy with Yim. The economy will be in complete shatters if it is left unattended.
JoongAng Ilbo, Nov. 8, Page 30