[Editorial] CEOs Unhappy With Economic Policies

The Korea Employers Federation surveyed 211 CEOs of companies with more than 300 employees and found that 91.2 percent think the government’s economic policies are “below average.” According to the survey, 52.1 percent said they were “unsatisfactory,” 39.1 percent answered “average,” and only 8.8 percent replied “satisfactory” about the government policies.

The result is a stark contrast to the government’s own assessment of its policies.

The CEOs regarded real estate and labor policies as failure. The Roh administration boasts that its real estate measures cooled speculation and stabilized the market, but that measure got the worst marks. Koreans wonder whether the administration likes the difference, considering it as a successful result of a strategy to differentiate the administration from the rich, or dismisses it as a survey outcome, saying corporate leaders tend to give low marks to the government.

Aside from the survey result, next year is critical. A survey on some 3,600 companies conducted by the Korea Development Bank showed a mere 0.1 percent increase in the amount of money they plan to invest in equipment. A slow increase in capital investment undermines the potential of economic growth. Manufacturing companies answered they will utilize 79.3 percent of capital investment from inside their own companies, which implies that many companies with plenty of money are reluctant to invest for fear of uncertainty in a business environment.

The survey revealed that the information and technology industry, and mid- and small-sized companies were not planning to invest in equipment. This worries many that the polarization between mid- and small-sized companies and large exporters will continue to grow.

The Roh administration came up with its own measures to deal with the growing polarization in Korea, but it turns a blind eye to more fundamental strategies and pushes for big government measures like collecting more taxes and spending more. The administration reveals the typical incompetence of the government.

The real economic growth rate for next year is predicted at 4.2 percent to 5.3 percent. Now, four years into governance, the administration, for the first time, aims at achieving economic growth commensurate with the potential growth rate, but considering its track record, that is not enough. It has said that it plans to make a business-friendly environment, yet little has changed. Political events like local government elections scheduled next May are to have a negative impact on the economy. The government should first and foremost ease the difficulties, including regulations, that companies face when they invest.