Cheong Wa Dae opposes to NPAD leader’s view on economic crisis

In the meeting with President Park Geun-hye at the presidential office Cheong Wa Dae on Tuesday, New Politics Alliance for Democracy (NPAD) Chairman Moon Jae-in, said, “The Korean economy is in general crisis.” Moon also said the government’s economic policies failed to enhance the quality of people`s lives while the domestic economy had been in trouble and the public struggled to make ends meet. In response to Moon’s comments, Cheong Wa Dae held an emergency press briefing and gave nine pages of press release to refute Moon`s claim on Wednesday, saying, “Groundless crisis theory dampens sentiment of economic players and works counter to economic vitalization.”

Cheong Wa Dae said, “(The government) has been exerting efforts to revitalize the domestic economy, and Korean economy is now improving,” citing last year’s economic growth of 3.3 percent, which has gone up for the two consecutive years, and the strong job creation of 533,000, a record high in 12 years. However, it is doubtful whether the public agree with the government’s announcement. In February this year, the National Statistical Office`s data showed that the youth (between 15 and 29) unemployment rate reached 11.1 percent, setting a new record high since July 1999. This statistics announcement is the opposite of Cheong Wa Dae’s claim. The unemployment rate is even higher than that of 2010 (10 percent) when the global financial crisis rapidly drove the domestic economy into slump.

Those who fanned the flame of "economic crisis theory" were the administration and the president. Deputy Prime Minister and Finance Minister Choi Kyung-hwan implied a possibility of deflation right after his inauguration in last July, saying, “Korea is desperate since it could go into a deep swamp of long-term stagnation, if we lose the opportunity.” In the policy speech at the National Assembly in October, President Park emphasized, “Korean economy is still in a crisis. The Assembly, the government, the public and businesses must exert all-out efforts to revive the economy.” Even ruling Saenuri Party Chairman Kim Moo-sung put pressure on the Bank of Korea to lower the key interest rate on March 4, saying, “The bank must consider (rate cut) seriously as Korea is at the initial stage of deflation.” Despite all of this, Cheong Wa Dae denied when the opposition party admitted Korea was in an economic crisis. Does it mean that Cheong Wa Dae has been a fear-monger to pass the bill? Or, is it okay not to put all efforts to vitalize the economy?

If Cheong Wa Dae opposed Moon’s comment so as to highlight the President Park’s economic achievement, it is excessive loyalty that could mislead the public. Global management consultancy McKinsey & Company listed Korea as one of the seven countries with household debt levels that may be unsustainable. Another ill omen for Korean economy is that its flagship industries, such as electronics, heavy industries, steel manufacture and petro-chemistry, are losing global competitiveness. Many listed companies are suffering from negative sales and operating income. It is concerning that Korean economy’s future is not visible.

The main opposition party has reversed the joint statement that was released on Tuesday`s tripartite meeting, which also put the public into disappointment. It is now asking the government to propose a draft agreed upon with the labor union, rather than presenting its own proposal related to the public servant pension reform. It is doubtful whether it is possible to achieve the reform within the agreed time frame. If Korean economy is in crisis as Moon said, NPAD must take care of countermeasures that were agreed in the tripartite meeting, which include public official pension reform and passage of the service industry development act.