ed Spirit of 'New Deal'

Saving economy is everybody’s business

Korea Inc. is in deep trouble and the only way out is for the government, corporations, employees and other economic players to get a collective sense of crisis and work together for economic revival.

Let’s make Korea’s own “New Deal” with the same level of gravity, expediency and, most of all, a sense of camaraderie as former U.S. President Franklin D. Roosevelt used to save his country from the heart of the Great Depression.

The current situation cannot be underestimated. Unless the problems are addressed properly and immediately, the economy will tank even further. Even Finance Minister Choi Kyung-hwan admitted that Korea is plodding down a path similar to that of the “lost decade” of anemic growth that hit Japan. Japan is showing signs of recovery under Abenomics, characterized by the artificial depreciation of its currency. Lacking deep pockets and the consumer base Japan has, Korea may not have the luxury of stagnating as long as Japan. So finding a remedy is even more important. Here is the status report.

The Bank of Korea (BOK) Thursday confirmed that the economy is showing no signs of recovery.

Gross domestic product (GDP) rose a mere 0.3 percent in the second quarter from the previous one, marking the fifth consecutive quarter with below 1 percent growth. If this trend continues, the 3 percent growth target for this year could be hard to achieve.

More worrisome is that these abysmal growth figures have come despite a strong macroeconomic mixture ― four key rate cuts in the space of a year and 50 trillion won, or $43 billion, in stimulus for the past three years. Besides, there is little more to go around for such a pump-priming purposes, and even if there was it is hard to ascertain the effectiveness.

This situation calls for a different approach.

President Park Geun-hye is right pushing for her four-reform agenda, starting with the labor sector.

The focus is to enhance the flexibility of the labor market. Workers’ fears are well understood, but making it easier to fire employees is only one side of the coin ― the other being to increase the chance of employment and reemployment. With the general elections scheduled for next year, the window of opportunity is narrow and it is Park’s job to persuade and convince the unions. She can invite them to Cheong Wa Dae, for a change, as she did chiefs of 17 big conglomerates for lunch Friday.

Those 17 tycoons and stand-ins need to chart out a future, instead on sitting on their cash and wringing their hands. Take the example of POSCO’s Kwon Oh-joon, who has been pressing for restructuring, using the current trouble that is not of his own making as an opportunity.

Once and for all, chaebol should stop protecting each other at the risk of reinforcing a wealth gap-created schism in society. The case in point is a repeated call for special pardons or parole to be granted to the affected. Since the government is considering them, it is advisable to wait.

In FDR’s case, the U.S. Congress helped. Now, the National Assembly has a similar role to play, but by and large has failed to do so. To save the tanking economy, everybody should participate, politicians included. Besides, we can afford to live without political partisan wrangling for a day or two.