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[Editorial] Economic Crisis Upon Korea

Posted June. 30, 2008 03:04,   


Bloomberg described the current situation in Korea as the “captain fighting against the storm while the crew is attempting to throw him into the sea.” It is a warning that the ship of Korea could sink because our society is in serious chaos while the negative economic factors are emerging. Reuters also said, “The fourth largest Asian economy is heading toward a darker future.”

Moody’s Senior Vice President Tom Byrne said that the protests against U.S. beef imports could damage Korea’s economic growth and foreign investment in the country.

As such, warnings and advice from the outside world is uniformly sobering. The world is warning that it would be hard for Korea to maintain its status as Asia’s fourth largest and the world’s 10th largest economy if it wastes time with internal conflicts, failing to wisely respond to the global economic recession.

There is no reason to be overly sensitive about outsiders’ perception of Korea. But there is every reason to listen to their objective and cool-headed assessment of the situation. As the country needs to revitalize its economy by attracting investment from foreign corporations, it is not in a position to ignore perspectives of the international community.

Indeed, a variety of economic indicators, which show the soundness of the country’s economy, are sending warnings. In the first half of this year, the country posted more than $10 billion in deficit for the first time in 11 years, largely due to the oil price hike. The Business Survey Index dropped to the lowest point in 41 months. As further hikes in utility charges are expected in the second half, the middle class and those in the low-income bracket will suffer more economic burden. The nightmare of stagflation in which an economic slowdown and inflation happen at the same time is being materialized.

While the country is gripped by the anti-U.S. beef imports protests, its economic foundation is collapsing rapidly. It is time for the government to concentrate all its energy on overcoming the economic crisis and improving the people`s livelihoods. Economic agents, including households and businesses, should raise their awareness that they are in a serious economic crisis now.