Depth of economic trouble no news

The economic ministers meeting at Cheong Wa Dae on Saturday suggested the possibility of revising macro-economic targets for the year. As the growth of the world economy has slowed far more than expected and the volume of international trade also shrank considerably it is inevitable to readjust our approach to the economy on the macro-economic level.

Of late the value of the won to the dollar has become highly unstable in tandem with the weakening of the Japanese yen. Slowing export growth and other adverse external variables may have forced Korea to move away from the originally set macro-economic indices.

However, the easygoing perception of the situation by the government gives us cause for grave concern. Officials have repeated that the Korean economy would hit bottom during the first quarter and be back on track toward recovery in the latter half of the year. Economic policies were based on these rosy presumptions. On the other hand, private-sector research institutes kept predicting a worsening economy on the basis of various indicators which began emerging since the end of last year, warning against optimism on the part of the government. The latest developments show that those non-governmental economists saw the situation straight and right while the officials were in the wrong.

The outcome of the ministers` meeting has come as an acknowledgement by our policy makers that they were rather too naive and complacent about the state of our economy. The government came to recognize the bad omens rather too late and then rushed headlong into devising untimely countermeasures. Officials are not wont to foresee the future, undertake meticulous analysis and prepare proper measures in advance. This time around, they are again coming up with a stop-gap prescription as the situation has deteriorated precipitously.

That they have come to their senses even if belatedly might be considered fortunate. How effectively and with what degree of strong resolve the measures discussed during the weekend conference could be carried out remains to be seen. As long as the external factors are beyond our control, the first thing to be done is to relieve the gridlock in the money market. Stabilization of the financial sector is far from easy, but only an eased money market could provide a clue to a sweeping solution to all the economic malaise and malady. So, those measures have to be put into practice in earnest.

Acceleration of restructuring is also necessary. In late February the government said it would pursue restructuring with vigor and without respite. Yet, the government appeared to remain quite diffident and laggard, inviting complaints and criticisms from some foreign investors.

Mere words will get the Korean economy nowhere. Now, we want to see a government going at it in deed, rather than in word.