Roh Says Reform Won’t Be Delayed by Other Priorities

The message of President Roh Moo-hyun’s economic policy in his address to the nation on Saturday can be summed up as saying that the people’s livelihood and economy will be top priorities, but reform won’t be delayed due to current difficulties.

In particular, some analyze that because conflicts about “pro-growth policy” and “reform policy” within the ruling party have unfolded, the President has tried to direct government policy towards the latter by mentioning “economic reform” extensively in his address.

--“I will not neglect the difficulties surrounding people’s livelihoods”

President Roh Moo-hyun focused most of the latter part of his address on solutions to economic problems. “For the last two months, although I couldn’t work at all, I reviewed our economic situation very cautiously. Daily lives of small business people, small-scale merchants, temporary workers and middle-class people have gotten worse, so I will not let this problem alone,” he stressed.

With external situations like high oil prices deteriorating, this seems to reflect a reality where middle-class people suffer more due to stagnation in domestic demand.

The fact that Roh is expected to hold a meeting with ministers of economy-related ministries, including Deputy Prime Minister and Minister of Finance and Economy Lee Hun-jai, to review the economic situation at Cheong Wa Dae on Monday clearly illustrates this well.

Therefore, measures to support small businesses and Korean traditional markets are likely to be considered.

However, Roh expressed that a short-term solution was not the goal, saying, “I will not undermine our potential for growth because of pressure by urgent issues.”

--Does a second-term policy line focus on reform instead of growth?

“Practices of expanding crises in order to block reform and change unfavorable policies to ourselves into favorable ones should be eradicated,” President Roh Moo-hyun contended at an address to the nation. The general analysis is that he considered business opposition to the proposal of the Revised Fair Trade Act, including limitations on decision-making rights of conglomerates’ financial affiliates and the media’s critical perspective on our current economic situation.

Particularly, in parts of his address, he emphasized this by inserting some content that had not been in his original address. Therefore, a more intensive “Reform Drive” towards conglomerates driven by the liberal lawmakers of the ruling Uri Party and the Fair Trade Commission are likely to be propelled.

But, some worry about the impact his so-called “Reform Drive” will have on our economy as negative factors like soaring oil prices and China shock remain combined with stagnation in domestic consumption.

--Subtle difference between President and Deputy Prime Minister

There are subtle differences between Roh’s descriptions of “Reform Drive” and the “Pro-growth Policy” emphasized by Lee.

Lee said at a press conference with local and foreign reporters at Jeju Convention Center holding the annual general assembly of the ADB (Asian Development Bank) in Seogwipo city on Jeju Island on Sunday that “because stimulating investment and creating jobs is crucial at this stage, we should put the emphasis of our economic policy on growth, not distribution.

“Most of the current government’s policies have followed a road map which was made late last year or early this year. I don’t think new changes will come with them,” he added.

As to the problem regarding temporary workers, Roh said, “I will address this issue not to lead the lives of middle class people to irreparable suffering. Meanwhile, Deputy Prime Minister Lee has made the condition that we should keep the major premise of ‘the flexibility of the labor market.’”

Jong sik Kong Jin-Hup Song kong@donga.com jinhup@donga.com