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[Opinion] Japain? Korear?

Posted February. 25, 2008 04:02,   


Japan’s “lost decade” began in 1990 with the bursting of bubbles in its immovable asset and stock markets. Japan went through years of strenuous reform and declared its economic depression over in early 2004. At the time, 40 writers of the business daily Nihon Keizai Shimbun closely scrutinized the efforts to end the depression, including 100 yen shops, and published the book “There Is a Reason for Big Hits!” This book said key industries of Japan such as cars, electronics and machinery did not lose competitiveness despite the long depression, and that the solid saving rates of households never weakened despite the real interest rate staying at zero.

This year, the Economist in an analysis said Japan’s economy remains depressed and its politics are also stricken with problems. Though Japan was once expected to lead the world economy in place of the tired United States, the magazine said it no longer has the potential to do so. Next to this article, a cartoon depicted brush writing in the alphabet “i” between “pa” and “n” of Japan, or “Japain.” A number of causes have caused such pain, including the U.S. subprime mortgage crisis, but the Economist blamed political impediments as the biggest cause.

What course will the Korean economy take under new leader Lee Myung-bak? Looking at the economic cycle, the recovering phase of last year has now shrunk. Many say achieving growth of five percent this year seems unlikely, let alone the six percent set forth by the new administration. Large enterprises said they will expand investment and employment, but nothing has been fixed. If the Korean economy keeps rearing back, someone might soon call the country “Korear.” “R” is the first letter in the word “recession,” one of the most hated words in economics.

The economy will stay stable as long as the triangle of investment, expenditures and exports maintains suitable form. This year, stable growth seems more appropriate than a flashy cycle. This year should serve as a time to improve business conditions drastically and to scatter seeds. Fortunately the word “rear” also means “to raise” or “to stand up on rear legs (a horse gesture).” For our economy to stand the strain, there should be no political impediments to economic growth.