OPINION

[Editorial] Misguided view

By Korea Herald

Presidential staff must shed unrealistic view of economy, show it to Moon as it is

  • Published : Nov 25, 2018 - 17:21
  • Updated : Nov 25, 2018 - 17:23
Kim Hyun-chul, the presidential adviser on economic affairs, said in a seminar Thursday that economic circles and the media are trying to nip reforms in the bud by talking about crisis when no economic crisis exists.

He then said, “It is more deplorable for them to talk about crisis repetitively to keep demanding that businesses must be encouraged.”

These words were his responses to suggestions that businesses should be encouraged and employment increased to overcome signs of crisis which have appeared throughout the national economy.

An economic adviser to the president views those who demand businesses be encouraged as being aided by them and such demands as impurely intended to scupper reforms.

Few governments in the world would have this view.

We cannot but ask what else we can do but help struggling businesses to get the nation out of economic slump and employment crisis.

Even liberal scholars who attended the seminar were reportedly embarrassed by Kim’s remarks. They noted that it was a misguided notion to regard raising an issue about crisis as distrust in the government or an attack on its policies.

Not only economists but also businessess and the self-employed know acutely that the nation’s economy is in bad shape.

With economic indicators on employment, investment and consumption as they are, it is difficult to deny that the economic situation is getting more and more difficult.

As much as 54 trillion won ($47.6 billion) in government money was spent on job creation programs for two years under the income-led growth policy, but the results have been terrible and the term “employment cliff” has gained household familiarity.

The income gap between the top and bottom brackets reached its widest in 11 years in the third quarter. Income inequality has deepened as employment has shrunk and job creation faded.

And yet, the presidential economic adviser denies there is a crisis and views warnings of crisis and calls for business-friendly policies as attempts to thwart reforms. How can the nation ward off crisis with such thinking?

It is common knowledge that the way to restore the economy is to boost the vitality of businesses. Labor systems must be reformed and regulatory restrictions removed to revive employment and investment. Unless businesses are invigorated, few jobs will be created and workers’ incomes will hardly increase. Public-sector jobs created with tax money will only burden taxpayers and younger generations.

President Moon Jae-in said in a Cabinet meeting last week, “I am happy to see the automobile and shipbuilding industries recover.” He called for efforts to seize the opportunity as things were improving.

This is out of touch with reality. Orders placed with large shipbuilders increased slightly, but they are still less than one-fifth the level of the boom days. Mid-sized shipbuilders see orders dropping about 20 percent this year. Car production rebounded temporarily, but the accumulated output this year has decreased about 5 percent, with exports also falling.

Moon might have made the remark because his economic staff deny signs of crisis and regard talk of crisis as a conspiracy to obstruct reforms.

Moon’s approval rating recently plummeted. In a poll by Realmeter released Thursday, it dropped to 52.5 percent, the lowest level since he took office in May 2017. It was 53 percent in a Gallup Korea poll released on the following day. His falling rating indicates that the public are being alienated from his government.

Among major factors behind the rating drop are the slumping economy and the deteriorating livelihood of the public. Many young people and many self-employed people have turned their backs on Moon. Those in their 20s are depressed by gloomy job prospects, while small business owners struggle to survive, hit hard by the sharply raised minimum wage and a sagging consumption.

If the government wants to see Moon’s rating bounce, his economic aides must depart from an unrealistic view of economy and businesses, and show them to Moon as they are.