ed Shadow of crisis

It’s time to join forces to head off challenges

There are mounting warnings that the Korean economy is facing another crisis. This time around, fear about its chances is rising as the nation’s two flagship companies are in trouble.

The structural decline of Korea Inc. is no longer news. As low growth has become chronic, exports, consumption and investment have weakened simultaneously, resulting in high unemployment.

Asia’s fourth-largest economy shows no sign of picking up next year. The Bank of Korea cut its growth forecast for 2017 to 2.8 percent last week ― for the third time this year.

But private think tanks even call the latest prediction “too rosy,” saying the central bank’s expectations for the recovery of exports and investments next year seem overly optimistic. They warn against the spread of trade protectionism following the inauguration of the new U.S. administration, whoever wins the presidential race in November. It’s also likely that consumption will freeze further, affected by swelling household debt, the sagging property boom and the full-blown influence of the anti-graft law that took effect in September.

Tackling our structural problems remains elusive, too. There has been much talk about the need to present a quick fix of the rapidly aging population and stubborn low birthrate, but few viable and realistic measures have come out. A growing number of experts seem to believe that Korea is already following in the footsteps of Japan that is still grappling with the aftermath of its “lost two decades.”

More recently, fears are mounting that the recent fiascos at Samsung Electronics and Hyundai Motor might gobble up Korea Inc. in the end. In fact, the halt in production of Samsung’s Galaxy Note 7, and strikes by Hyundai Motor workers, have taken a toll on exports with Korea’s September shipments plunging 5.9 percent.

The biggest question is that no one dares to act responsibly at a time when the shadow of crisis already looms large.

Bureaucrats have been all talk and no action when it comes to structural reform, engrossing themselves in keeping the economy afloat only through the real estate boom. They tend to shelve important decisions for fear of being held accountable for policy failures, as evidenced by the drifting restructuring of the shipping and shipbuilding industries.

The National Assembly has been negligent in dealing with the badly needed bills for structural reform while blindly engaging in political wrangling. Opposition parties, in particular, look as if they want the economy to crumble in the run-up to next year’s presidential election.

Businesses also have lost their entrepreneurship and appear on their way to collapse, satisfied with what they have been doing. Despite high wages, aristocratic labor unions at large companies have gone on strike, causing disruptions in exports.

All these problems are nothing new, and so it’s difficult to expect quick solutions. What is certain, however, is that we shouldn’t sit on our hands.

What is needed most is for President Park Geun-hye to exercise her leadership to convince opposition leaders that they should cooperate to ride out the looming crisis. It’s long overdue for her to act resolutely as the head of state.