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[Reporter`s view] Fear of crisis might cause a 2nd one

Posted December. 14, 2000 13:45,   


As late as October this year, a researcher at the Samsung Economic Research Institute was more or less optimistic about Korea's economic future. However, recently, he did a turnabout and is of a pessimistic viewpoint, saying that the economy is headed for a dive.

As a specialist on the real economy, his turnabout was due in part to certain domestic and international circumstances but also largely to the flood of urgent voices warning of the yet unseen economic crisis leading to a decrease in consumer spending, a vicious cycle.

"Considering the economic indicators such as the foreign currency net surplus and the domestic economic indicators, although there is a very low possibility of a second economic crisis, the public and the market have been reacting as if the crisis already has begun," the business affairs division of the government said.

Many of the public economic experts and government officials in agencies and departments related to the economy are concerned about the side effects of such a widespread public perception of an economic crisis.

"The primary factor that drives the economy is the perceptions and the spending habits of the people," Finance-Economy Minister Jin Nyum said. "Having a certain level of crisis awareness is beneficial. But being obsessed by it could lead to a real one."

A director of the planning and budget division said: "Although our economy is clearly in a bit of difficulty, the anxiety of the public has been fanned by distorted and exaggerated viewpoints. Who does it benefit?"

Blame also has fallen frequently on certain economic news providers, as well.

"Certain papers have fanned public anxiety by reporting as if the failed restructuring soon would lead to a total collapse," an official at the finance and economy agency said. "Then the papers went on to report on worries of mass unemployment, using a less-than ethical double standard."

Some have poignantly accused the economic experts and the media of engaging in a face-saving act to take the lead in predicting an economic crisis as atonement for their failure to predict the one in 1998.

It does indeed seem as if an economic winter is here to stay for a while. It might be advisable for us to remember the words of Franklin Roosevelt, U.S. president during World War II, in a speech made in May 1941: "We have nothing to fear but fear itself."

Kwon Soon-Hwal shkwon@donga.com