Listen to the experts
The author is an editorial writer of the JoongAng Ilbo.
A former journalist famous for his economic columns, made a witty comment about the confidence of the government despite the apparent economic troubles epitomized by President Moon Jae-in’s pronouncement that the economy was moving in the right direction.
He talked about the “polarization of power.” A compass that depends on the magnetic field of the earth becomes useless when it approaches the Arctic. The needle designed to point to the north cannot do so as it reaches the North Pole. Similarly, power points to the Blue House and when it arrives there, it loses all sense of direction and falls out of sync with the rest of the world. That’s how the Moon administration can be so rosy about the economy when the reality is exactly the opposite.
The government boasts that the quality of employment has improved even as irregular hires have surged by 860,000 over a year. The economy has performed among the worst in the developed country category, with growth under 1 percent. Jobs for those in their 30s and 40s have been in decline for 24 months.
The devil’s advocate who speaks the truth cannot last in this government. The ruling front is under a collective spell and there is no one who can blow the whistle. Kim Kwang-doo, the vice chair of the presidential National Economic Advisory Council, may have been the last and sole devil’s advocate as he left his position after pointing out the flaws in the income-led growth policy in May last year.
Without any critical voices within, the ruling power’s polarization could become worse. Many are worried about the country gone astray. They make repeated pleas out of genuine concerns about the country’s future. Economic veterans Sakong Il, honorary board director of the Institute for Global Economics, and Kim In-ho, director of the Korea Capital Market Institute, have joined the chorus. They served in the government and various public posts from the 1960s to 1990s, when the country achieved its rags-to-riches transition.
Sakong was the longest-serving presidential secretary on the economy and served as the finance minister twice. Kim was the chief of the Fair Trade Commission and also a presidential secretary for economy. Both headed the Korea International Trade Association (KITA) and are well versed in policy and business affairs. The two published books pleading with the liberal government to correct its direction on the economy. In his book “The Choices for the Korean Economy’s Sustained Prosperity,” Sakong argued that the economy will only worsen if the income-led growth policy is not abandoned. The Moon Jae-in administration should pay heed to the voices of experts to finish its term successfully.
He was most concerned about the rapid deterioration in growth potential. The government has the utmost duty to raise growth potential through innovation. Innovation can be excited by “spontaneous optimism.” But the public policies so far have sapped such corporate impulses, he said, calling for a change in policy direction.
Kim published a memoir of his, “50 Years with the Light and Shadows of the Korean Economy,” looking back from 1967, when he started his career with the Economic Planning Ministry, to 2017 when he served as the chair of KITA. His book launch was filled with experts including former Prime Minister Han Duck-soo. I finished the 1,000-page book over the weekend. Having served as the price policy bureau chief at the economy planning agency under general-turned-President Chun Doo Hwan, he would have seen the works of state control, but has become an avid champion of free market economy. “The economy can work only under the market principles defined by the demand and supply. Nationalism was wrecking the future of the country. Without finding the course toward the market, the economy has no future.”
Sakong also agreed that an economic policy that disregards the market cannot work. The Moon administration must not feign listening, but really listen to the voices of experience.
JoongAng Ilbo, Nov. 20, Page 34