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[Commentary] Focus on policy rather than politics

Posted October. 13, 2000 15:12,   


People tend to easily forget what happened in the past. It is the same for an individual or a nation. It is even more so if it is unhappy past.

When business is booming, people tend to forget recession in the past. People who live in a large apartment tend to forget when they were living in a small apartment. Perhaps, it is because they are worried about return of such unhappy past.

Prosperous days used to be followed by slump. The prosperous days could be prolonged and recession may be shortened. But, we cannot expect prosperous days last forever. The United States, which is now enjoying unprecedented economic boom is not an exception. The recent trend of the stock market tells the lesson.

These days, the economic cycle is different from that of the past. In particular, Korea's economic pattern has changed substantially since late 1980s. The cycle is still there but the length has changed.

The economic cycle is moving along with the term of presidency. To be exact, it followed the pattern since inauguration of President Roh Tae-Woo. The economy shows prosperity during the early days of presidency and recession begins during the latter half of the term.

Stock prices also followed more or less the same pattern. Stocks prices tend to rise during the early days of presidency but slide as the term expires. During the early days, the government takes aggressive economy-boosting measures, but they usually do not last long.

Former president Roh Tae-Woo tried to boost economy by building 2 million houses and the government of President Kim Young-Sam stimulated economy with 100-day new economy plan. The current government of President Kim Dae-Jung tried to boost the economy with the fever of venture businesses. In fact, venture storm is said to have contributed to the nation's economic recovery.

President's popularity depends upon economic situation. During the early days, they obtained great popularity but it used to crash at the end of the term. It is presumed that President Kim's popularity must have declined substantially. Kim proclaimed that he will directly control the economic matters.

But, the ruler's direct involvement in economy tends to have a bad influence upon the nation's economy. In the past, we experienced that consumer prices soared with overheated economic activities or jobless rate increased with economic recession.

In fact, the role of the U.S. Federal Reserve Board chairman Allen Greenspan is to curb the desire of the president to control economy. He is so popular because of the fact. As an economic president, he is pursuing independent policies regarding interest and currency.

Currently, the Korean economy is heading toward recession. We might have to worry about 'soft-landing' of the Korean economy. The venture fever has cool off and the stock market has frozen.

The plan to build new towns seems to be aimed at boosting the economy. Construction sector is most effective to boosting economy. The question is if it will be effective for economy-boosting as planners think.

It wouldn't be easy to boost the economy with the projected construction of new towns, not mentioning the problem of shortage in construction materials. In a digital economy, it is a shortcut to promote technology development in the fields of information and communications industry or to boost the stock market. It is time to focus on efficient use of resources to sharpen the nation's competitiveness in the future.

We would expect that the government will adopt a policy to prepare for the future instead of politics to boost the economy for an immediate effect.

Park Young-Gyun parkyk@donga.com