Requirements for a new president

We are in the middle of three roaring currents. The first is the gigantic vortex of democracy and market economy crashing into globalization. The second is the torrent from the United States as Donald J. Trump’s era is about to begin. The third is the muddy stream of President Park Geun-hye. When the three currents meet, Korea may fall into a catastrophe beyond recovery. And we desperately need a new leader who can wade through the currents.

A new president, or a prime minister if the constitution is amended for a parliamentary government, must have the following qualities:
First, the new president must have a plan for democracy and the market economy in the era of globalization. Democracy and market economy are the most important systems of the society. However, globalization has made the harmonious working of the two systems more difficult. State-level democracy cannot control globalized economy.

Globalization is bringing markets around the world into one. If only a limited number of people can produce goods that are in high demand in the global market, their incomes would skyrocket. In contrast, the people with simple skills can be replaced by foreigners, their income level would not increase, and their job security is threatened. In one country, income disparity grows, and the income of the parents affects their children as well.

Consequently, voters would demand redistribution of income. But raising tax on businesses and the wealthy would make them relocate as globalization has enhanced their mobility. This is the root of Trump’s victory in the United States and the UK’s decision to leave the European Union. In the end, there are no clear answers aside from system reform and enhanced sense of community. If the new president cannot address this properly, Korea will be adrift — politically and economically.

Second, the new president should be able to respond to America’s changes as a result of Trump’s election. Key exports of the Trump administration would be confusion and uncertainty. We would experience shockwaves over economic and North Korean issues. If Trump raises tariff barriers against China as he promised during the campaign, it would lead to a rise in consumer prices in the United States, consequently lowering the real purchasing power of American households, especially the lower-income class that supported him.

While he promised a low interest rate policy, he also promised increased spending on infrastructure. When American voters are disappointed by the president for failing to fulfill his campaign pledges, the political pressure could spread to Korea-U.S. FTA, renegotiation of defense costs for the U.S. Forces in Korea and the designation of currency manipulation.

The North Korean issue is of extreme importance and requires thorough preparation. If not, we may waste several years without making progress in denuclearization as Trump believes he can solve problems by talking with Kim Jong-un over hamburgers. Or, if North Korea continues with nuclear and long-range missile tests, the United States may pursue very hardline policies, including military actions.

Unless Seoul prepares realistic and convincing North Korean policy and communicates with the Trump administration, not only would resolution become remote but also a serious discord between Korea and the United States may occur. The new president must have a detailed plan on the priority of sanctions, pressure, engagement and exchange, and denuclearization and normalization.

Third, Korea needs someone who is honest and transparent. Those close to President Park Geun-hye committed corruption and illegalities in all possible areas. The state administration was hardly transparent. Moreover, the president lied to the citizens in her first apology as if she only got help with speech editing. However, not many people believe that the prosecutors will expose the full truth. It is a colossal crisis of trust. To overcome the crisis, an honest person who can transparently execute democratic procedure must become president and build trust.

Honesty is the source of trust, and trust is the basis of democracy and market economy. When people cannot trust the president, the representative democracy collapses. Without trust, there would be no transactions, businesses or investment.

The economic price of distrust is tremendous. The incumbent president betrayed trust that resulted in at least millions of won of invisible taxes on each citizen. She took away potential jobs from young people. Average citizens feel betrayed after trying so hard to abide by the anticorruption Kim Young-ran law to create a transparent society.

At this rate, the political crisis may spread into an economic crisis and national crisis. Before a new lineup of the Trump administration is complete, a capable, wise and honest person should become the new president of the Republic of Korea.
Translation by the Korea JoongAng Daily staff

JoongAng Ilbo, Nov. 17, Page 35

*The author is an economics professor at Seoul National University.

Kim Byung-yeon