Lawmakers must take responsibility for overlooking potential crises

The clash between Saudi Arabia and Iran has led to a steep rise in the foreign exchange rates of the Korean won. Saudi Arabia, the largest Islam Sunni state in the Middle East heavily exposed to terrorist threats and sectarian strife, has announced to sever diplomatic relations with Iran, the leading Shiite state in the region, sending the price of the WTI for February delivery as high as by 3.5 percent. Typically, a rally in international oil prices triggers a plunge in the price of stocks, which are considered risk assets. Compounded with the anxiety over the fundamentals of the Chinese economy, the opening day of global stock markets in 2016 has turned into a “Black Monday” with the Shanghai Composite Index and KOSPI falling by 6.85 percent and 2.17 percent, respectively. As a result, the exchange rate against the U.S. dollar rose by more than 15 won for Korea as investors stampeded into buying up the dollars. The crises from the Middle East and China, which had been warned of as the fuse to the global economic risks, have erupted simultaneously and much earlier than expected.

“The volatility of the global economy is greater than ever due to low oil prices, the rise in the interest rate in the U.S., and the economic slowdown in emerging markets,” Finance Minister and Deputy Prime Minister Choi Kyung-hwan said at the new year kick-off meeting held at the Sejong Government Complex on Sunday. "Korea is facing a very difficult moment of potential crisis."

Hyundai Motor Group lowered its sales target at 8.13 million, down 70,000 from last year, which is the first since Chairman Chung Mong-koo assumed the post in 1999. During the new year’s greeting ceremony on Sunday, President Park Geun-hye also cited some of the risk factors for the Korean economy such as global economic downturn, youth unemployment, weakening corporate competitiveness, and political situation surrounding the Korean Peninsula.

Despite such an acute sense of crisis, it appears that the opposition parties are seeking to advance their political cause by taking advantage of the difficult times. While the unemployment benefits need to be increased along with the increased minimum wage, the bill has yet to be legislated. Even Rep. Kim Kwan-yeong of the main opposition Democratic Party of Korea says, “I am doubtful if lawmakers are making any effort to do something about the basic livelihood of our people.”

It would be practically impossible to pass the bills for economic revitalization and labor reform in the last provisional session of the National Assembly, which is only four days ahead. Above all, the revised bill on facilitation of corporate restructuring (facilitation bill) that has to serve as the groundwork of workout, has not been passed since late last year, putting three major companies on the verge of getting court receivership. During the parliamentary standing committee held last year, Minjoo Party Rep. Kim Gi-sik openly disagreed to the extension of the facilitation bill and Rep. Hong Yeong-pyo said that even if the Special Act on Improving Corporate Vitality is passed now, it will lose effectiveness in a year. The lawmakers must take responsibility for their remarks. It is time the opposition parties should learn to consider the private sector as a partner instead of treating it as a necessary evil.