Not the time for ideology

Yi Jung-jae
The author is a columnist at the JoongAng Ilbo.

President Moon Jae-in held the first cabinet meeting with new faces, including Justice Minister Cho Kuk, on Tuesday at the Seoul campus of the Korea Institute of Science and Technology (KIST). The school is coincidentally one of the locations under investigation by prosecutors for allegedly issuing a fake document certifying completion of an internship program to Cho’s daughter and helping her polish her credentials for her application to a medical school in Busan.

Moon said it was meaningful that a cabinet meeting was held at a symbol of science and technology for Korea. He vowed to make a “strong economy that cannot be shaken.” To those baffled by the president’s appointment of Cho as justice minister even as his wife was indicted on multiple charges, his words sounded as if he was defending Cho as someone “who should not be shaken.” Moon’s presence could have been a signal to possible whistleblowers at KIST to keep their lips sealed.

Worse, the president doesn’t seem to be aware of his own wrongs. He speaks of non-interference in the economy. But his actions have already shaken the economy. When politics get overly involved, the economy comes to a standstill. If the president is ignorant of such a simple cause and effect, he will wreak havoc on our economy.

The first consequence is more uncertainty. If politics shake, so does the economy. Hong Jung-wook, a former lawmaker and founder of natural food company Organica, noted that Korean enterprises have never been free of political influence. “Watching the never-ending political wrangling makes one wonder if there is anyone tending to the economy,” he said. Companies will have to keep a low profile.

Then there is the risk of distortion in the policy process. The president made his choice of Cho on the back of his loyal 40 percent support base. He ended up capitulating on his slogan of fairness, equality and moral values. Substituting something that is not remotely equivalent is bound to result in disappointment. The other 60 percent has become resentful. When political wrangling becomes fixed, policy-making will lose its flexibility, consistency and transparency. Every issue can stoke opposition, a backlash or dirty deal-making. When the government promotes an anti-Japanese policy, for instance, the 60 percent on the other side of the fence will not approve. When the government pitches a “peace” economy with North Korea, only 40 percent will support the idea.

President Moon Jae-in, left, takes a picture with newly appointed Justice Minister Cho Kuk after presenting him a certificate of appointment at the Blue House on Sept. 9. [JOINT PRESS CORPS]

The ramifications on the economy will be dear. Our growth potential will keep on sinking. Korea needs to desperately pull up its growth potential. A rate of maximum growth for the economy that hovered at 7 to 8 percent in the 1990s has sunk to the 2 percent range. The pace has slowed even further under the current administration.

Growth potential is bolstered by capital, labor and productivity. Capital and labor inputs can no longer be relied on to contribute to growth because capital is constrained by internal and external uncertainties and labor has become hostage to our rapidly aging population. Raising productivity is the only way. The national system must become efficient through innovation, but political wrangling cannot allow innovation. Kim Dong-won, a professor at Sungkyunkwan University, said that flexibility in policy is essential to rationalizing the national system, but it only retreats if politicians are engaged in an ideological battle.

Moon and Cho may think they have time. But the economy does not. The globalization that once fueled growth for the Korean economy is being shunned as more governments turn anti-globalization. The Pax-Americana has come to an end, and Pax-Sinica is still far in the future. The global landscape on the security front is changing fast, but policies in Korea are backtracking. Beijing perceives Seoul to be pro-U.S. and Washington thinks Seoul is pro-China. Seoul does not have the dexterity to please both. Koreans sense gruesome similarities to the late Joseon era when the Korean Peninsula became victimized by a global power struggle. They fear for their livelihoods as well as national viability. Yet the government leisurely chases Utopian socialism and state-led nationalism, which helps deepen our ideological divide.

Conflict and division can be fatal to an economy. Companies and individuals stop spending. Korea has been the only market whose stocks and currency value fell sharply at the same time. If ideology-driven politics continue, the government will soon face doom.

JoongAng Ilbo, Sept. 12, Page 26