[Opinion] Momentum

Morgan Stanley, a U.S. based investment bank, said recently that South Korea’s economy is losing momentum. Originally a physics term, momentum refers to motive power, and the comment means that the engine that drives South Korea’s economy is cooling. The diagnosis is worse than saying the economy is in a recession. “Although the October indices improved, it seems to have past the point of rebound,” said Morgan Stanley. According to the analysis, economic shrinkage is possible.

Export in November totaled $30 billion and exports this year are anticipated to exceed $300 billion. Samsung Electronics is about to achieve an annual export performance of $50 billion. Is our economy really losing momentum? Exports in the second half of the year surpassed initial expectations thanks to the steady growth of overseas markets such as China, the recovery of the world’s economy in information technology, and the downfall in international oil prices. It is hard to expect that such favorable factors will appear again next year.

Concerns that Korea’s economy is cooling down are rising and enterprises are appealing for capital investment relief. But the government is still holding fast the regulations. Do those in the Fair Trade Commission and ruling Uri Party, persisting on putting investment ceilings on large enterprises, think something would seriously go wrong if they assented to the request to lift regulation in the private sector and let investment expand? Or do they think suppressing large enterprises is what reform is?

What could be weakening the momentum of the economy? The unreasonable conceit of the president and the economic bureaucracy are definitely the first cause. Every time they say “the economy is good,” they end up backtracking. The situation would have been better had they practiced 1% of the promise that they would “lift regulations and make a enterprise-friendly nation.” In the meantime, they eagerly demand budget funding. It is the government that is slowing Korea’s economic momentum.

Editorial Writer, Hong Kwon-hee, konihong@donga.com