[Editorial] Will our economy make a hard landing?

Tensions are mounting over the continuous warnings at home and from abroad that the Korean economy faces a high risk of a hard landing following a rapid decrease in the economic growth rate.

The U.S. Wall Street Journal predicted that Korea`s economic growth rate would remain at the 3 percent level next year, and therefore the corporate liquidity shortage will worsen for a big possibility of a hard landing. A leading German economic daily also forecast that the Korean economy will make a hard landing due to the sluggish progress in reform. It is not clear if these foreign news outlets made similar pessimistic predictions regarding the Korean economy at the same time by chance or if foreigners were seeing ahead of us the red light we have yet to find.

What is more worrisome is the Bank of Korea¡¯s analysis that the gross domestic product (GDP) growth rate went down to the single-digit level in the second half of the year for the first time in five quarters. This gives rise to a fear that the economy may be on the decline starting from the second half as the central bank`s long-term analysis shows. Some conglomerates are launching brisk activities to secure cash in anticipation of the fund shortage, adding to our uneasy feeling. It has a deep meaning that an enterprise that enjoyed the largest profits decided not to make next year`s calendars in order to reduce expenses.

So far, we have hoped much from the export growth rate, but the trade account is deteriorating most rapidly among competing nations by registering the highest import growth rate. What makes the situation worse is that venture firms, which played the role of locomotive for our economy in the latter half of last year, are lacking in pep as the 110-point level of the Kosdaq index collapsed. Although the nation ¡°graduated`` from International Monetary Fund management officially a few days ago, it is true that our economy is in a state of uneasiness without knowing when it will go bankrupt.

Amid this difficult situation, the government announced a rosy economic operation plan for the latter half of President Kim Dae-Jung`s tenure. Of course, it is desirable that the goals should be set as high as the government can achieve with a strong will. What is important is whether or not they have the concrete processes to implement them.

Factors shaking the market, which does not tolerate even a single momentary blunder such as the Hyundai incident, still exist, and there has not been any bright news about corporate and financial restructuring. Yet, the government is only showing a somewhat lenient attitude after the Cabinet reshuffle.

Enterprises` autonomous efforts will be good and the restructuring in the financial sector will be good, if it is carried through as planned. But we could suffer the humiliation of ¡°entering the IMF¡± again after we face an abrupt credit crunch as a result of our negligence in restructuring efforts as pointed out by foreign experts or mass media. The government has the initial responsibility.