Exports have been doing well lately, with an 18.7 percent increase in January. That is an especially fine performance when you consider the difficulties created by the fallen exchange rate. Domestic consumption, too, is showing slight signs of improvement after continued months of stagnation. Automobile sales and credit card use are up, and the stock market is on the rise. Is the economy bouncing back, or is too much being made out of how a few indicators happen to be doing well? If you look at the economy's performance in January, the embers of recovery do seem to be coming back to life. But it is still too early to be optimistic. Especially in times like these, the positive elements of recovery need to be kept on the right track while there is simultaneously effort to improve the economy's structural weaknesses.
The government says it is going to work hard to get the economy moving this year. Budget expenditures will be spent in concentration in the first half of the year while implementing a "comprehensive investment plan." It would appear the government's active approach played something of a role in the signs we are seeing of economic recovery. That is the most basic stance a government should assume. To encourage those involved in moving the economy to be more ambitious in the months ahead, it needs to formulate detailed measures and faithfully implement them.
On the other hand one worries that the government will get too greedy and promise big things, having become confident as a result of the improved indicators. Past experience indicates that the government is not free from the temptation of going too far with measures to stimulate the economy. It must not get close to forgetting how poisonous it is for the economy to use leverage that comes in the form of credit cards or real estate. The work underway by the government and ruling Uri Party to ease conglomerate investment restrictions and to weaken securities class action lawsuit legislation is problematic enough. Those two proposals have already been clearly found to have no direct relation to investment by conglomerates. What is needed urgently are substantial measures to resolve the disparity between various sectors of society, because only by resolving the disparities will the economy become sound again and will there be an improvement in the structure of the country's economy. There will be limits to what can be done about both if recovery is all that gets emphasized. Naturally there also needs to be an urgent expansion of the social safety net.
The Hankyoreh, 2 February 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Economy Bouncing Back? |
