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[Op-Ed] Fighting the Crisis

Posted January. 03, 2009 06:17,   


With the global economy in recession, it seems like clear skies and abundant snow are not enough to attract many visitors to the great slopes and ski resorts of Switzerland. Things are no better in Austria, which saw the number of affluent skiers from Arab nations and Russia plunge this year. Singer Lindsay Lohan is also a victim of the global economic recession. Her concert celebrating the New Year in Miami did not sell out. The specter of the crisis seems to haunt everywhere. The United Kingdom expects job losses to reach an additional 600,000 and Russia 500,000. The International Labor Organization frowned over its projection that 20 million people worldwide could lose their jobs by the end of the year.

In the face of the crisis, countries that fought hard to avoid the impact of the U.S.-triggered financial crisis just a few months ago are now desperate to shake away the specter of recession. Japanese Prime Minister Taro Aso said in his New Year’s address, “Japan will be the first to overcome the economic recession.” Those that are ahead in recovery are the most likely to secure economic dominance in the post-recession era. Based on a survey of economic experts, the Financial Times said the United States will be the first to pick up the pieces, followed by China, East Asia and Europe. Japan and Australia were included in the “slowest” group, while Korea fell under East Asia.

Implementing large fiscal stimulus is usually the surest way out of a recession. This is why countering an economic crisis is often called a “battle between R (recession) and S (stimulus).” When “S” wins, people get jobs. When “R” wins, people lose jobs. London Mayor Boris Johnson declared war on recession in his New Year’s speech, saying, “I want to quote Colonel Kilgore in `Apocalypse Now` when he says `Someday, captain, this war is going to end,’ and someday, this recession is going to end.”

In war, it is important to get a grip on the situation before taking action. When it comes to the economy, however, it could prove a tricky business. Even the United States, which boasts the highest expertise in economic forecast, is often bewildered when its figures turn out to be a far cry from reality. Korea’s economic indicators are released every quarter, with GDP being the most essential figure. Due to the long time lag, however, other information such as monthly industry and employment trends are added to make up for the difference in time. The “Green Book,” released every month by the Planning and Finance Ministry, offers an insight into how the government sees the economy. The decisions of the Bank of Korea can be found in the publication “Monetary Policy Direction” that comes out immediately after its monthly Monetary Policy Committee meeting on the second Thursday of every month. There is, however, no verification on their decisions afterwards, which shows Korea has a long way to go in drawing an accurate picture of its economic reality.

Editorial Writer Hong Kwon-hee (konihong@donga.com)