Deputy PM Changes Mind About Sweden

Kwon, the appointed deputy prime minister, wrote in his 1991 comment on the national economy, “The common strategy that South America and Sweden took was to place equality and welfare on the top of its policy list. They put far more emphasis on them than on any other national objectives. As a result, most of these countries moved toward inequality and an anti-welfare society.”

“Governments wasted budgets beyond their economic capacities under the name of improvement of income and the welfare of the poor. That led to an increase in consumer prices and unemployment rates, widening trade deficits, and finally ended up with stagnation. Taken altogether, the policy only resulted in the increase in the number of poor and marginalized people.”

Overall, his point is that an expansion of social welfare system is needed, but the Swedish-style excessive expenditure on social welfare is dangerous.

After 15 years, when he assumed his post as ambassador to the OECD, however, his 34-page report on Sweden’s social welfare model and its implication were quite different.

Kwon pointed to what we should learn in his opinion on the condition that there is a limit when applying Sweden’s model to nations with totally different backgrounds. Kwon added, “We have to learn how to adapt to society’s changing environment through constant fine tuning without delaying social reform; in particular, we should extend public services with the focus on social welfare while maintaining a big government.”

He stressed that Sweden’s social model is the key to moving in a good cycle of social welfare and economic growth.

Don’t Talk only with Results-

Dong-A Ilbo tried to contact Kwon to ask the reason why he changed his view on Sweden’s social model, but it failed to get an interview. Instead, Choi Hoon, the director of the Financial Hub Coordination Institute of the Ministry of Finance and Economy, delivered his comments, saying, “The report was misinterpreted. I don’t want you to talk about it only with the results of the model. Of course, Sweden suffered many difficulties, but we should focus on the process that the country had gone through to meet such challenges. In a nutshell, we should pay close attention to constant change, adaptation to the change, and reform; its active response to the wave of globalization and transparency of the public sector that were preconditions of the country’s social reform.” However, he did not explain where his view on the model came from in 1991 and what the motive was that changed his view in December 2005.

An Evaluation on his Modified Stance-

An Economics professor at Sogang University Kim Gwang-doo said, “It is understandable that he can have a different perspective on the model as his position is now different, and furthermore the overall situation in Sweden has become quite different over the past 15 years. We need to review his political view, especially on the social welfare policy, as it is likely to make our country move in the direction that South America had taken when we once take wrong social policies. Na Seong-lin, an Economics professor at Hanyang University pointed out, “the top priority of the Korean government in 1991 was to achieve $20,000 per capita income, but now the top priority of the current government is to achieve a balanced economic growth in all sectors through the elimination of economic divides. After all, he showed the bureaucratic nature of Korean government officials who have to adjust their focus in line with the president’s policy.”

Hyun-Jin Park witness@donga.com