Former President Kim Dae-jung looked upon himself as the "economic president,” and pulled Korea out of the Asian financial crisis. General-turned-President Chun Doo-hwan picked the government’s most capable economist as his economic czar and left everything to him, saying, "As far as the economy is concerned, you are the president.” And it worked.
Park Geun-hye neither seems to be an economically-prepared President herself nor is regarded as having the most competent economic team. This is a cause for concern at a time when Korea’s growth engine is sputtering and the world is mired in a live-and-let-die currency war.
By most appearances, Korean exporters will likely have to struggle for quite a long time, as the G7 and even the G20 are not just tolerating but encouraging the weakening of the Japanese yen.
Fundamentally, the domestic businesses have no lasting solutions but to strengthen their competitiveness in quality as well as in price in global markets, through diversifying both their products and markets. There is no use crying foul, as the Korean exporters themselves have enjoyed the advantage of cheap currency for a long time. Now is the time to learn from their Japanese counterparts which have overcome far steeper currency appreciation.
It was timely in this regard that President-elect Park called for active government efforts to help the private sector get over ongoing troubles.
Given the looming currency war abroad and the financial turmoil at home, however, there was a regrettable lack of urgency in her emphasis on the need for a "paradigm shift” and developing a long-term growth engine based on technology and creativity. "We should change our economic operation from the previous pattern of pursuing advanced countries to the pioneering style,” she said. That may be pleasing to the ear, but whether and how will it be possible?
Granted, Korea has to develop new growth engine despite its more immediate need for fairer redistribution, and Park’s nominee for top economic policymaker, Hyun Oh-seok, is a growth-oriented economist. But this is the 21st century and Korea cannot go back to the government-dictated development era of the 1960s and’70s.
Most worrisome is the visible dearth of financial experts in Park’s economic team. The President-elect has of course yet to name her top financial regulator and chief central banker, but there will be clear limitations to what these officials can do under the control of the economic deputy premier.
In a global currency war, emerging economies like Korea have only themselves to fend off the attacks of global capitals. Seoul will need to consider introducing the "Tobin tax” to slow the flows of foreign capital in and out of the country. We doubt whether Hyun, known for his market-knows-everything neo-liberalistic credo, has the will or ability to defend the nation’s currency.
It’s time the next President, who vowed to pick talent regardless of regional and political backgrounds, should practice what she has preached. And nowhere else is this more necessary than in recruiting economists with strong talent and leadership.
So far we have seen no such nominees.