Honest explanation on economic democratization adjustment

President-elect Park Geun-hye`s transition committee on Thursday announced key policy visions and goals for her administration. Her five main goals and 21 strategies are centered on building a job-oriented creative economy and providing tailored welfare services. The most salient things in the announcement were what could be considered a withdrawal from her campaign pledge to pursue "economic democratization" and the expression of a will to accelerate the implementation of other pledges. Over the campaign period of the presidential election, President-elect Park championed four major slogans: national unity, political reform, job creation and economic democratization, and reconstruction of the middle class. Economic democratization, however, was excluded from the key policy goals of her administration. Since announcing her candidacy in July last year, she has consistently touted economic democratization as part of her core vision.

The transition team denied backtracking from the economic democratization pledged, saying its proposal of 164 priority tasks for the new government contained many elements related to economic democratization, including deregulation for small businesses and a stricter crackdown on unfair businesses practices and crimes by large corporations or their controlling families. Yet many of the president-elect`s campaign promises were not included in the announcement, including a ban on suspended prison sentences to large shareholders found guilty of embezzlement and the right to appoint outside directors by minority shareholders. More important is the symbolic meaning of downgrading economic democratization from one of the main goals to the fifth item under the objective of a creative economy. This suggests that the new administration will give top priority to creating jobs by nurturing new engines for economic growth.

Over the campaign period, the fear was that the competition among presidential candidates to pursue economic democratization would get so overheated that it would result in bashing big business and thus ultimately hinder economic growth and job creation. Adjustment of the significance of economic democratization in key policy goals poses no problem, but this should not give the impression that the president-elect is reneging on her pledge after winning the election. She won because she appealed to the ideological middle by embracing economic democratization, which was originally a proposal by progressives. The president-elect was right to actively campaign against Korea`s socio-economic bipolarization intensified by globalization and the global economic crisis.

Economic democratization is a task that requires the wisdom of the golden mean. President-elect Park should neither give the impression that she does not take her pledges seriously nor cling to it as dogma. If revision is necessary, she should offer honest explanations to the public and make readjustments through consensus. That would show true courage of a nation`s leader.

Also problematic is the procrastination in shaking off certain welfare promises deemed excessive. Implementing all of the president-elect`s welfare pledges would cost 135 trillion won (124.4 billion U.S. dollars) over the next five years. Tax increases are thus inevitable but the government might postpone them for a while. Once introduced, however, welfare benefits are hard to abolish and add to the fiscal burden. Early action is needed.