President Park Geun-hye’s “474 vision” is the slogan used to promote her political aims. It befits the definition of a slogan, which is, according to one dictionary, a phrase that is easy to remember and used to attract attention.
Her slogan is short and simple ― a cluster of three Arabic numerals and one Koreanized English word. It is drawing public attention, as the deputy prime minister and other top economic policymakers, as well as the president herself, are repeating it over and over again.
One drawback is that complicated ideas are often oversimplified and pushed into a short phrase and, as such, it tends to be misleading. It is the same with the “474 vision” ― her grand idea of maintaining growth potential at 4 percent, keeping 70 percent of all people aged 15 to 64 in work and raising per capita gross domestic product to $40,000.
It may not be too difficult to keep growth potential at 4 percent. The Park administration expects the Korean economy to grow 3.9 percent this year ― a level that is perceived to be near growth potential.
But the problem is that, should the economy grow at an annual average rate of 4 percent, it will be impossible to attain the other two goals before President Park’s five-year term in office ends in February 2018. Technocrats are already groping for an escape hatch. Shortly after Park unveiled her “474 vision,” her senior economic secretary came up with a lame excuse. He said, “She will open an era for $30,000 (in per capita GDP) and lay the foundation for $40,000.”
The 2013 per capita GDP estimate is at $24,044. The International Monetary Fund believes that it will grow to $30,875 in 2017 if the Korean economy expands at an annual average rate of 4 percent. An economic policymaker did not dispute the IMF estimate when he was quoted as saying that per capita GDP could reach the $40,000 level in 2020 if the Korean currency continued to gain against the U.S. dollar.
What about the employment rate of 70 percent? This goal may prove to be even more elusive than the $40,000 in per capita GDP.
Last year, the net increase in jobs was 386,000, which surpassed the forecasts of the government-funded Korea Development Institute and the Bank of Korea, both of which believed the net increase would be 300,000 or slightly higher. But the robust performance made only a small dent on the employment rate, raising it by 0.2 percentage point to 64.4 percent in 2013.
The job market will have to develop enormous vigor if the employment rate is to reach 70 percent by 2017. According to one estimate, 450,000 new jobs need to be added to the existing ones each year ― a number that could be turned into reality should the economy grow at an annual rate of 5 percent to 6 percent.
Park will have to moderate her vision if she does not want to follow the footsteps of her immediate predecessor, Lee Myung-bak, who was ridiculed for his “747” plan ― an annual average growth rate of 7 percent, $40,000 in per capita GDP and Korea’s entry into the Group of Seven.