Send a clear messageOn Monday, the government fixed the direction for its 2019 economic policy in an expanded meeting among economy-related ministers. It plans to raise next year’s economic growth to 2.6-2.7 percent through all available policy tools. The government has put top priority on “revitalizing the economy” by spurring corporate investments, enhancing the competitiveness of our mainstay industries and taking deregulatory steps.
That’s a retreat from the government’s adherence to so-called “income-led growth.” Announcing its policy direction for the second half of the year five months ago, the government pledged to implement income-led growth at a fast pace. This time, however, it expressed the will to deal with unwanted side effects from its relentless push of the policy. It has also promised to determine the minimum wage in a rational way after taking into account market conditions and apply the rigid 52-hour workweek in a flexible way.
Such a shift reflects the government’s nervousness about its pushing of a totally untested economic concept. The market and economic players will welcome it. But confusion lingers due the message’s to opaqueness. In a speech during Monday’s meeting, Moon reiterated that many people could not feel the positive effects of the administration’s economic policies. His remarks are in sharp contrast with what new Deputy Prime Minister for the Economy Hong Nam-ki briefed him only five days ago. “Our economy is in a grave condition,” he said. We wonder what the president really has in mind.
Moon also commented that the government should prepare supplementary measures for the drastic increase in the minimum wage and the 52-hour workweek, if necessary. That gives the impression that the government still does not know if its economic policies call for supplementary measures to ease market woes. The Blue House’s new policy chief Kim Soo-hyun must communicate with business leaders. If decision-makers speak with one voice, it can help investments and consumption.
Hong underscored the importance of the government sending a clear message to the private sector: he got it right. It is time for the administration to make clear its intention to concentrate on deregulating the economy and raising flexibility in the labor sector. That’s a shortcut to creating jobs and recovering our economic vitality.
JoongAng Ilbo, Dec. 18, Page 30