Ignoring economic realityWhen will the ruling power get real about the economy? The Democratic Party (DP) was all self-congratulatory about economic performance under the Moon Jae-in administration. Secretary general Yoon Ho-joong spoke how food prices were stable during the Lunar New Year holiday. He also claimed the Korean economy performed the best among the developed members of the Organization for Economic Cooperation and Development (OECD). The problem is that few outside his party would agree with the observation. Korea’s growth rate of 2.7 percent in 2018 is nowhere near the top of the OECD rankings.
The U.S. economy, with per capita income of $60,000 — double Korea’s — is estimated to have grown from 2.9 percent to 3.1 percent last year. Exports that had long sustained the Korean economy fell for the second consecutive month in January. The Bank of Korea predicts exports to fall by 1.4 percent this year.
The domestic situation is just as bad. The self-employed have been devastated by double-digit increases in the minimum wage for two years. As many as 195,000 part-time and irregular jobs were wiped out last year. Starting taxi fares went up to 3,800 won ($3.38). Popular delivery foods, like chicken and jajangmyeon (black bean noodles), have also gone up along with delivery fees. The ruling party blames the conservative media for “distorting” the facts and feeding wrong information to the people to worsen consumer sentiment.
It is bad for the economy to be entirely pessimistic. But being overly optimistic is also harmful. A wrong diagnosis leads to the wrong prescription. The ruling power must stop trying to see what it wants to see about the economy. It must face reality and take necessary remedial actions.
JoongAng Ilbo, Feb. 8, Page 30