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[Opinion] Does President Roh Know the Meaning of “Looking after the Economy”?

[Opinion] Does President Roh Know the Meaning of “Looking after the Economy”?

Posted November. 01, 2005 03:01,   


President Roh Moo-hyun seems to be misunderstanding what the people mean by “looking after the economy.” On Sunday, President Roh said, “Shaking hands with the public does not lead to an instant recovery of the economy. It is not right to ask doctors to stay beside their patients all day. It will be like asking them to do nothing but give injections.” But when did we ask the president to go to the markets and shake hands with people?

The Korean economy is deeply mired in low growth with stagnation in domestic investment and consumption. Major contributors to the current economic hardship are lack of jobs, weakened consumption, less ability to pay taxes, difficulties in improving distribution, and increasing gap between the haves and have-nots. Many experts point out that more serious problems lie in the politics and the government’s policies that are failing to solve them and only aggravating the situation. By “looking after the economy,” we mean examining fundamental reasons for the current economic slowdown and demonstrating leadership to coordinate conflicts so that policies are directed according to problem-solving principles. In this regard, one cannot help but wonder if President Roh has been truly fulfilling his role of looking after the economy.

Let us look at the domestic investment and consumption. Domestic facility investments have been negative for two consecutive months of August and September while Korean firms’ overseas investments are increasing at a two-digit rate. Meanwhile, domestic consumption is weak compared to overseas spending which is rising by 20 to 30 percent. In order to solve this problem, Korea needs to have a more flexible labor market and introduce greater deregulation. In addition, we have to foster an environment where companies and individuals can spend their money more freely at home. There are preconditions for achieving those goals. First, the labor, management, and the government must compromise. Second, the government should get away from regulatory selfishness. Third, we need to create both economically and socially ‘business-friendly environment’ and ‘alleviate class conflicts.’ The leadership of the president has a significant part to play here. So the question here is how much the leadership of President Roh has helped in these matters.

Now, let’s narrow it down to the problem of the gap between the haves and have-nots. “The Korean economy has overcome the critical point, and the prospects are bright. However, the prospects for the people’s livelihoods are still bleak,” said the president. In other words, the economy is growing decently, but problems arise due to bipolarization. We already know from experience that policies demanding sacrifice from the wealthy to save the poor will only give rise to a vicious cycle of declining growth and worsening distribution of wealth. It is the president who must take action to harmonize the country and save the troubled companies. He must also change policies that trigger class conflicts. This is what we mean by “looking after the economy.”