[Editorial] Is our economy reviving the crisis three years ago?

The nation's economy, three years after the IMF intervention, appears once again to be rapidly heading for a period of serious economic slumps. Our current exchange reserve and macro economic indicators may not show that the economy is approaching a crisis proportion, but subduing effects of reduced consumer spending and investments are unmistakably conspicuous.

The fact that we were able to graduate from the IMF regime at an early stage, can by and large be attributable to, then, such external factors as low crude oil prices, appreciation of Japanese yen and special overseas demands for computer chips. But, our economy is now encountering adverse, external conditions such as sharp increase in oil prices and low prices of chips which will incur us an additional burden by the loss of some 30 trillion won. What exacerbates our uncertainties is the fact that the U.S. economy, our major export market, appears now passing the peak of its business boom.

The political impasse due to the partisan showdown between the ruling and opposition parties is certainly intensifying our economic uncertainties. The parliamentary paralysis and the delays in passage of bills relevant to the raising of the public rescue funds create the strikingly similar situations we encountered in 1997 when the failure to pass the reform bills gave rise to the lowering of our credit ratings overseas. The delays in resolving the cases of the Hanbo Group and the Kia Motors caused our plummeted credit ratings in 1997. The Hyundai Engineering and Constructions, and the Daewoo Motor are now creating similar situations like the two firms did three years ago.

In retrospect, the Kim Dae-Jung administration's greatest failure during the three years of the post-IMF era was its delays and foot-dragging in undertaking the reform efforts and the restructuring drive as well as its premature declaration of the so-called IMF graduation, which were obviously dictated by its partisan considerations before the general election.

For that reason, the people's determination to readily endure pains of reform and restructuring was eased and lessened as to bring forth the pervading social atmosphere of moral hazards. Public corporations represented the least restructured sector preserving themselves same as before the IMF. The employees there maintained their jobs as if they are the ``untouchable bread- earners.'' The big deals had the good intentions but failed because they went against the principles of market mechanism.

Many people argue that our present crisis is not so much a situation crisis as a crisis in our readiness and competence to counter it. Apart from the government's policy failures, the lack of leadership on the part of the ruling party with minority Assembly seats tends to intensify our psychological uncertainties about the economy.

Any failure to raise timely public funds could derail not only the financial and corporate restructuring but, in particular, it can frozen up the bond markets of private corporations as to cause them enormous cash crunches. The administration understandably attempts to resolve the Hyundai Construction case by making the brothers of its chairman render financial support, instead of taxpayers' money, to rescue the ailing firm. But, our worry here is that it can bring forth negative effects on foreign investors.

The government was out in front to sell the Daewoo Motor but it became the source to drain the public rescue funds because it is still unable to find any prospective purchase of the ailing motor firm since the Ford Motor' renunciation of its bid to buy the company. The Daewoo Motor' union, too, must come out with fresh new thinking for the rescue. Their resistance against restructuring when the firm is impossibly non-viable will surely lead to total bankruptcies from which none can survive.

The recurrence of the economic crisis akin to three years ago will be inevitable if all the parties, be they political including the ruling and opposition parties, the government, business tycoons or labor unions, are forgetful of the humiliating and painful experience of the IMF intervention.