Yoon pushes for Xi’s visit to firm up ties with China
Esports legend Faker seeks to lead Korean surge at Asian Games
Incheon Airport passenger traffic to recover during Chuseok holiday
[Hello Hangeul] The making of Korean language textbooks featuring BTS
Korea’s parental leave benefits lag behind OECD average
Golden apples: Why fruit prices are national issue in early autumn
Korea trade volume sees sharp drop among OECD members
Seoul prepares for first major military parade in ten years
2m Koreans opt out of life-extending treatments
[Korea Beyond Korea] Early Koreanists 'on verge of extinction overseas'
[Editorial] Lesson in curbing inflationBy Yu Kun-ha
Published : Jan. 5, 2012 - 18:07
Under the system, a section chief of, for instance, the Ministry of Strategy and Finance would be made responsible for checking the price movements of, say, napa cabbage. If cabbage prices are forecast to go beyond a certain level, the official is expected to take whatever steps are necessary to bring the prices down.
This measure is a follow-up to a pledge Lee made in his New Year’s speech. Lee promised on Monday he would do all he could to stabilize consumer prices this year. “The government will bring down inflation to the lower end of the 3 percent range from 4 percent last year,” he said.
Lee stressed at the Cabinet meeting that government officials should have a sense of responsibility for stabilizing consumer prices.
“I have never seen any official take responsibility for the government’s failure to prevent the prices of daily necessities from wildly fluctuating,” he was quoted as saying.
Lee’s concern about inflation is welcome. And he was right to urge government officials to step up efforts to prevent unnecessarily wild movements in the prices of key daily goods, which affect the livelihoods of ordinary people.
But his strong-arm approach to curbing prices has not quite been effective. In 2008, he ordered officials to put the prices of 52 key daily goods under enhanced monitoring and compute their inflation rate separately from the consumer price index. The so-called “MB price index” based on these 52 items, however, is not much different from the CPI.
Early last year, Lee also ordered the Fair Trade Commission to crack down on price hikes following steep increases in global commodity prices. The commission used its administrative power to prevent manufacturers of daily goods from raising prices. This coercive approach only delayed price hikes for a couple of months.
Lee should have learned a lesson from these examples. Fighting inflation is basically the job of the Bank of Korea. Last year, the bank all but failed to keep inflation within its target band. This year, inflationary pressure is expected to be less severe, with consumer price increases forecast to slow to 3.2 percent. This may give some room for the bank to cut interest rates if the eurozone crisis boils over and negatively affects the Korean economy.
Opposition leader Lee attends arrest warrant hearing at Seoul court
Young swimmer enjoys self-fulfilling prophecy in gold medal-winning race
Chief justice seat at top court left vacant amid Assembly chaos