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[Editorial] Gov’t Should Find a Breakthrough Over Economic Policy

[Editorial] Gov’t Should Find a Breakthrough Over Economic Policy

Posted April. 26, 2008 06:03,   


An extraordinary tension has been building between the Lee Myung-bak administration and the ruling Grand National Party (GNP) over the direction of the nation’s economic policy. Amid growing battles over economic policy, Strategy and Finance Minister Kang Man-soo and GNP economic policy Chief Lee Hahn-koo seem to be on a collision course, not just over the supplemental budget, but over the proposed tax cut and deregulation.

The GNP put a hold on 13 out of 53 economic plans proposed by the administration. On the other hand, the government also showed reluctance to accept 11 out of 12 tax cuts supported by the GNP in the extra session of the National Assembly this April. The administration cited the need to be more cautious or outright rejection. Some in and around the political circle say the discord between Minister Kang and GNP policy chief Lee has something to with their uneasy relationship. Others say the two seem to be anxious not to lose their self-respect to the other.

In fact, the administration and the ruling part may not be necessarily congruous at all levels of policy management. The administration is responsible as the policy executor, while the ruling party takes responsibility to reflect public sentiment in providing state affairs. However, conflicts over some economic pending issues have become enough reason for concerns over the implications on the nations’ overall economy.

As for supplemental budget, though it passed, after more than 10 days, it is not clear whether it will be signed. The administration and the GNP both seem to fail to recognize the urgency of the matters, as if they are determined not to admit defeat in a spirit of rivalry. They should realize that confusing and inconsistent policies stemming from their competitive spirit will only bring harm to ordinary citizens. With supplemental budget plan drifting, domestic enterprises find their business projects stranded in this impasse.

Both sides have a point. Minister Kang wants to spend some net budget surplus as supplementary budget to boost domestic consumption, while Lee insists on a tax cut and deregulation. The question is whether they should let policies drift and miss an opportunity.

GNP chief policymaker Lee Hahn-koo complained saying, “The Finance Ministry heavily relies on the administration, instead of resorting to the market economy.” The administration should note this remark. In contrast, it is also clear that effective policies themselves are power. In this regard, Minister Kang and GNP policy chief Lee are reflecting their “obstinacy and self-righteousness.”

The two men are believed to hold common ground in adhering to the free market economy, rather than being leftist governmental bureaucrats or factionalists. In this sense, it seems absurd and incredible if they contradict each and every case. Minister Kang witnessed the nation free fall during the Asian financial crisis in 1997 when serving as the vice economic minister. Lee also saw Daewoo Group collapse when he worked as president of the Daewoo Economic Research Institute. Now is the time for both of them to come face to face with one another over ways to improve the economic future of the nation.