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[Editorial] Economy is reset to start from a zero base

Posted November. 03, 2000 20:48,   


Today marks an important watershed for our economic recovery. It is the day to sort out the debt-ridden, ailing corporations. Their unredeemable debts were choking our financial institutions to threaten our entire economy.

Our economy will have a fresh, new start if the liquidation or sale of the 50 business companies, as designated by their creditor banks, are smoothly undertaken and completed without much repucussions on our market.

For the time being, it will be inevitable that the arrangements affecting many business firms en masse at one time, will produce some shocking effects on the sectors of real economy. Naturally, the chain-effects are worrisome but inevitable: their subcontractors or subcontract factories and plants may go bankrupt, and temporary shortage of liquidity in capital market can also be anticipated.

We trust that the government and the creditor banks will have the enough measures to counter such fallouts, since they must have foreseen the side effects. They must also be ready to meet their unforeseen ripple effects.

If they are firm and feel right about the present directions for our economy, they should display confidence by promptly taking the follow-up measures to meet any future eventualities.

To be sure, what is more important than the liquidation of those firms is the neat completion or settlement of the situations evolved from the weeding out of those ailing firms out of the market. Indispensable in the process is cooperations of all the involved parties: the government, creditor banks, the firms' managements, and the workers. Any protracted confrontations between them will make the structural reforms an unduly painful process to end up in empty results. The government must come forth with genuine and lasting measures to take care of the pains of the workers who may have to be laid off before the winter season.

The government and creditor banks should bear in mind that our economic recovery will hinge on how neatly we can accomplish our new efforts for the 2nd structural reforms, and that they must maintain an unswerving stand in keeping the spirit and principles of our structural reforms. It is regretful that there already emerges some voices of disharmony and discordance over the firms' liquidation.

The rumor in this regard has it that some firms were excepted from the liquidation by means of a barter arrangement between creditor banks. If the rumor holds any factual account, although we should not like to think it does, the prompt steps must be taken to remedy the cases based on the reform principles. Otherwise, the burdens will fall completely on the banks which engaged in such a barter arrangement to except the firms from liquidation.

Politicians must also do their part in rendering their support for the government to promptly use the needed public funds. Any partisan calculations or interests must not intervene to complicate the structural reform principles.

Politicians should know that our economy has suffered greatly from staging many political events including holding of general elections. If they are uncooperative this time as to ruin our reform efforts, they will surely have to face the people's resistance.

Should our efforts fail this time, we may never have the opportunities for economic recovery for some years to come. We urge all economic actors to arm themselves with the mind that they are making a new start from the zero base to plan their economic activities after the liquidations. Only then and when, we may cherish market economy built solely by our own efforts.