[Editorial] President Roh’s Plan for Economic Recovery, Understanding of Economics

Regarding direction of economic policy among parties, between business and labor, and even within the ruling party, confronting opinions have been prevailing. This is represented as prioritizing market reform and the improvement of distribution, or preceding the revitalization of market and stimulation of economic growth. I want to believe that their goals are the same: recovering economic stagnation, solving the obstacles standing against the recovery, and re-examining growth potential. However, it is highly likely that economic policy lines are getting more complicated and economic difficulties is becoming more exacerbated as different opinions regarding prioritizing each issue are confronting one another.

In addition, when it comes to understanding economic reality, emotional confrontations on whether or not there is a crisis is causing more confusion in the market. Once different diagnoses came out, it is highly unlikely that the parties involved will come to an agreement filling a valid prescription. This is raising my anxiety.

Accordingly, we watched the determination of President Roh Moo-hyun, who returned to work, regarding his understanding of economic situations and his policy directions on it, cautiously. President Roh made a statement and said, “I will not leave behind the difficult economic situation of people, and I will tackle economic problems with deep consideration.” First of all, I welcome his statement. However, if such a comment really irons out current, growing economic difficulties, concern for the economic crisis would not have taken place.

Unfortunately, I have to indicate that his incorrect understanding of the economic situation may exacerbate current growing anxiety in market. President Roh said, “Some exaggerate current economic difficulties so that favorable policy is adopted.” According to research, and economic experts, the majority of people in Korea said they felt an economic crisis. Even under such circumstances, the government suspects that companies exaggerate their level of difficulties intentionally. This proves a big gap between the government and private sector in terms of understanding economic reality.

President Roh also expressed his doubt on voices from economic sectors that strengthening regulations initiated by the government may shrink industrial investment. This is also consistent with the fact that he regarded concern on economic crisis introduced by some officials as unnecessary buzzing. If such an attitude from President Roh continues, who can trust his promises on “sincere efforts in managing crises?”

Even though President Roh promised the gradual increase of growth potential based on decent plans, it is difficult to expect economic recovery without setting up an environment to stimulate consumption and investment promptly. Therefore, President Roh must not lead companies and markets into the trap of uncertainty by suggesting recklessly out-of-control policies in the name of reform. Instead, he should focus on measures that boost companies’ morale and remove obstacles in further investment and desirable management. In doing so, current pending issues such as creating more job opportunities can be solved and, consequently, we can make progress in long-term challenges like creating more growth energy.

President Roh’s emphasis on reform, which seems to target artificial modification in conglomerates’ governance system, has given more momentum to reform-oriented groups within the ruling party. Accordingly, it is expected that deputy Prime Minister Lee Hun-jai and Hong Jae-hyung, the majority Uri party chief policymakers who are stressing market revitalization, have shrinking voices within the government. Under such environmental conditions, we cannot but cast doubt on the government’s ability to mediating different opinions emerging within the ruling party. I am very anxious about if ‘lost one year’ of Korean economic experienced last year recurs and difficult situation prolongs further

The first action President Roh should take for economic recovery is to prioritize police lines based on practical ground and reality through helping economic growth, which can lead to decent distribution. Besides, the ruling party should accept his initiative and trust his leadership consistently. The relationship between government and business must not be regarded as struggle like power against power, and companies must not be degenerated as objects to control. Rather than controlling companies, it is indispensable to help more create competitive companies through sincere support. In doing so, their growth potential will increase, and the economy can be revitalized.