Absurd Economy Promotion

The government is taking the initiative in promoting a rosy economic outlook which looks irrelevant to the current economic difficulties.

As President Roh Moo-hyun showed his optimism about the Korean economy in a special TV interview with MBC Broadcasting Company on Sunday, some say that the government leans too much towards optimism.

In a 28-page public relations booklet titled “Vibrant Economy, Transparent Society,” the Ministry of Finance and Economy (MOFE) said, “Though the Korean economy was in a difficult situation when the participatory government was launched, many results were achieved due to one and a half year’s effort made by the government.”

The booklet claimed that the Korean economy is on the rise, citing that the economic growth rate rose from 3.1 percent in 2003 to 5.3 percent in the first quarter of 2004 and to 5.5 percent in the second quarter, and that industrial production grew from 5.1 percent in 2003 to 12.3 percent in the second quarter of this year.

It also said that the economy is stabilizing with the inflation rate remaining at around 3.5 percent for the first seven months of the year, and that export is also in good condition, up 38.4 percent year-on-year.

After mentioning briefly that “the recovery of domestic demand is sluggish and risk factors exist in the financial sector,” the booklet stressed, “A vibrant economy and a transparent society will be achieved in the future through mid- to long-term strategies.”

The MOFE posted on its Web site an article that claims income is more equally distributed in Korea than in the U.S., based on the grounds of a U.S. income distribution data report for 2003 released on the previous day.

Economy experts criticized the ministry’s public relations activities, saying that such activities would deepen the frustration of average citizens when domestic demand is sagging and export growth is slowing down.

“The current economic difficulties are in large part caused by non-economic factors such as uncertainty about the government’s administration of state affairs,” said Professor Na Seong-lin at the College of Economics and Finance of Hanyang University. “What the government needs to do is not paint a rosy picture but inform of the difficulties of the economy correctly and urge the political community to concentrate on boosting the economy.”

Chi-Young Shin Yong Park higgledy@donga.com parky@donga.com