코리아타임즈 Mixed Report Card

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Mixed Report Card Remaining One Year Could Decide Roh's Economic Legacy

To all appearances, the government’s self-appraisal of its economic performance over the past four years contains far more praise than censure. The Roh Moo-hyun administration deserves some credit at least in major macroeconomic fields, such as growth, exports and stock price indices. In microeconomic areas of popular living, however, most people are feeling much worse off than four years ago. A bigger problem is that the gap between the statistical and real-life economy may widen in the years to come. Yes, the economy grew 4.2 percent a year, the seventh fastest rate among OECD members, exports topped $300 billion and stock markets kept breaking records over the past four years. These are all the more remarkable as they were made despite the financial burden left by the former Kim Dae-jung government. Nor did the Roh administration take major artificial stimulus steps so as to not repeat Kim’s mistakes. Hidden behind all these favorable figures are more structural problems, though. The biggest reason people could not feel the beneficial effects of export-driven growth were aggravating trade terms, particularly the strong local currency and high oil prices. One should acknowledge, however, these external factors are somewhat beyond the control of local policymakers. Still, Seoul needs to study how Tokyo has managed to keep the yen from strengthening too much while maintaining an export boom. The nation should also learn to live with high crude prices as a constant factor. Not all elements were inevitable, though, as most people are keenly aware. The biggest policy failure is mistaken emphasis and misguided priority. Excessive regulations that cooled corporate mindsets with regard to investment will be the biggest policy failure of the current government. The mounting unemployment, particularly among the younger generation, and the worsening quality of employment will be regarded as serious setbacks. The sluggish business investment environment is also all the more dangerous as it seriously erodes future growth potential. Too frequent but ineffective anti-speculation packages have only enhanced the adaptability of speculators, while deepening the sense of privation among the working classes. Last but not least, the numerous long-term development programs could seriously weaken the government’s fiscal health, as seen by the almost doubling of the state debt during Roh’s tenure. The remaining year should be a period not to amplify but to rectify these adverse side effects of economic policies. To be fair, the Roh administration’s economic report card should be called as mixed ­_ neither complete failure nor resounding success. But it is no time to remain complacent with statistical attainment, as some officials appear to be. Instead they must actively find out ways to take steps to increase people’s real purchasing power. Nothing seems to describe better the situation facing Roh’s economic team than the old saying, ``All’s well that ends well.’’