Living in an eclipse“Shall we play a game?” a hostess proposes to guests at a dinner party. The game is that anyone getting incoming calls, emails, or text messages during the dinner must share all with the other guests. The conversations and messages coming over the phones reveal the deepest secrets of the seemingly perfect couples, all old friends, on the night of a lunar eclipse in the Korean remake of the Italian film “Perfect Strangers.”
What ugly and uncomfortable truths does the Korean economy hide behind its seemingly solid surface? A looming crisis has been warned about throughout the year. The government has been showing a mixed response. In a meeting of senior officials from the Blue House, the ruling party and the government, former policy chief Jang Ha-sung struck down the talk of an economic crisis. He declared that positive signs will start showing next year. But Kim Kwang-doo, vice chairman of the National Economic Advisory Council, thought otherwise. He warned that the economy is shaking from its roots. Evaluations of the Moon Jae-in administration’s signature “income-led” growth policy are divided. Critics claim the economy is in its worst state in a decade, while advocates regard the attacks as politically motivated.
But you can hardly deny the worsening economic conditions. The number of employed among the working population from the age of 15 increased by 17,000 as of the end of September from the same period last year. During that period, the increase was 279,000. The unemployment rate in October hovered at its highest level since 2005. Facilities investment and industrial output data are bad. A majority of the people credit the Moon administration for diplomatic progresses on the inter-Korean front, yet rate it poorly on its economic performance.
Despite weakness in domestic demand, some claim that an economic crisis is a stretch, given strong numbers in exports and Korea’s passable growth rate among developed economies. They also say that though the macroeconomic data is poor, it does not fall into the category of a recession or depression. However, others argue that the semiconductor boom and big government spending are hiding the poor state of our economy.
Crisis is a medical term and refers to the symptoms accompanying an acute onset or worsening of a disease that could lead to a shock and subsequent death if left untreated. Crisis is a volatile and insecure stage in a sequence of events, or a turning point that could determine the future, for better or for worse. Likewise, depending on the incoming calls and what is revealed by the callers, a relationship among the old friends or couples in the movie, can break down or take a turn for the better.
The alarm has been raised announcing that the economy is heading straight into a critical stage. The industries and brands that had been pillars of Korea Inc. are coming down. Small merchants and the self-employed are struggling to stay afloat. The young cannot find jobs.
The Moon administration’s policy aimed at boosting the incomes of the working class through increases in the minimum wage and expanded social benefits and public-sector jobs actually undermined hiring and growth in the private sector. The government also failed to address structural problems — demographic challenges from our alarmingly low birth rate and aging, low productivity in the small and mid-sized and services segments, and a rapid evolution in technology and the structure of industries. The influence of unions has become even stronger. The promises of bipartisan governance and unity were not real.
The negative risks to the global economy have risen amid a wave of trade protectionism, accelerated monetary tightening, a protracted trade war between the United States and China, and a slowdown in the Chinese economy. Research institutes at home and abroad all predict that the Korean economy will further slow in 2019 due to its weakened exports on top of sluggish domestic demand.
Sentiment has soured. According to a recent Gallup Korea poll, 53 percent of the people questioned had pessimistic views about the economy, while only 16 percent were optimistic. More than half predicted worsened unemployment next year.
The closing narrative in the movie “Perfect Strangers” said that human nature was like the lunar eclipse. The moon may hide for a moment, but won’t go away. The same goes for the economy. The moon could hide behind the shadows of the planet, but its essence remains intact. We must face the realities of our economy: it’s sick and cannot be cured purely by the current government prescription. Instead of wrangling over whether we are in a crisis or not, authorities must fix any wrongs.
A crisis can lead to new opportunities and a fresh start. The government must shape up if it really wants to ease public jitteriness and pave the way to a true turning point.
Translation by the Korea JoongAng Daily staff.
JoongAng Ilbo, Nov. 22, Page 35