Future of 'Abenomics'

Korea has to prepare for all possible developments

Will “Abenomics” succeed or fail? That is the question that has gripped local economists since last Thursday when the Japanese stock market suffered the biggest setback since the tsunami

disaster

of March 2011.

Some analysts who predict the economic policy of the Japanese leader would fail seem to reflect in part the wishful thinking of Korean exporters reeling from the sharp fall in the Japanese yen. But they must know the failure of Abenomics and the consequent fall of the world’s third largest economy - and Korea’s third largest export market - back to

recession

would also be a great minus for this country.

Worse yet, it would

accelerate

the downward spiral of the Japanese monetary unit, posing even greater challenge to local export companies.

In a nutshell, Japan is too big to fail for the Korean economy as a whole. Still other Koreans might hope Prime Minister Shinzo Abe will stumble, thinking it would put the brakes on the Japanese leader’s unabashed revival of nationalism, but mixing politics with economy could cloud Seoul’s own economic judgment.

In conclusion, it is too early to predict the future of “Abenomics.” It can probably go both ways, depending on whether Abe will be able to push through crucial economic reforms before the financial markets give up their hopes. It is another race against time.

What matters is what Korean policymakers and business managers should do. Local exporters are crying that the weak yen is driving their products out of the global markets. But the current level of the Japanese currency - which changes hands at 1,090 won per 100 yen - is still overvalued compared with the average 960 won per 100 yen before the 2008 global financial crisis broke out. In other words, Korean exporters should still be humming now, not screaming.

It was only a few years ago that some media outlets bragged about major Korean makers of consumer goods, like auto and home electronics, were dominating their Japanese counterparts in world markets. The current situation shows they were bent on benefitting from the weak currency rather than making excruciating efforts to strengthen their non-price competitiveness by cutting costs and upgrading quality. They must also know major Japanese industries have

withstood

far sharper currency appreciation, which made their return to the global market possible.

Which indicates the time has long passed for Korea’s family-controlled conglomerates to compete with Japanese exporters one-on-one without the government’s supports, in currency and otherwise.

The government for its part needs to prepare for continued volatility in financial markets, caused by extreme monetary easing by major economies, including the United States and Japan, by

beef

ing

up

the nation’s foreign exchange holdings not to repeat the mistakes of 1997 and 2008.

President Park Geun-hye’s economic team should also discern what to learn and what not to learn from Japan’s examples. The painful corporate effort for enhancing competitiveness belongs to the former. But the debt-financed, construction-oriented, export-first growth strategy belongs to the latter. Now is time for Korea to move toward fiscally-balanced, service-led and domestic demand-bolstered economy. “Compete, prepare and differentiate” should be Seoul’s economic slogan in coping with Abenomics.

This is The Korea Times editorial for Tuesday, May 28, 2013.

※ 다음에 나오는 문제들은 본 사설에 나오는 중요한 어휘들로 구성된 토익, 토플, 텝스 기출 및 예상 문제 입니다.

※ Choose the one word or phrase that best keeps the meaning of the highlighted part.

1. An

intangible

feeling of disaster fills the room.

① potent

② concrete

③ impalpable

④ superficial

2. Do you expect a

to begin by the end of 2005?

① trade deficit

② budget deficit

③ decline in economic activity

④ economic expansion

3. Pollutants introduced into a lake can rapidly

its natural aging process.

① change

② speed up

③ turn around

④ destroy

4. Several air carriers are not in very good shape to

withstand

heavy losses, even in the short term.

① bear

② put forward

③ stand for

④ make out

5. The prospect of facing an unfriendly Russia once more might force the Clinton Administration to begin

beefing up

military spending, dashing hopes for reducing the budget deficit.

① stipulating

② reinforcing

③ criticizing

④ establishing

[해설 및 정답]

1. [번역]

만질 수 없는(무형의)

재난이 닥칠 것이라는 느낌이 그 방을 가득 메우고 있다.

[어휘] intangible 만질 수 없는(impalpable, incorporeal, imperceptible), 무형의(unreal, immaterial, insubstantial); 종잡을 수 없는, 막연한(vague)

[정답] ③

2. [번역] 2005말에

경기후퇴

가 시작되리라 예상하십니까?

3. [번역] 호수로 흘러 드는 오염물질은 자연의 노화과정(주로 부영양화)을 급속히

가속화 할

수 있다.

[어휘]

accelerate 가속화하다, 촉진시키다(speed up, expedite, facilitate)

③ 돌아보다

[정답] ②

4. [번역] 몇몇 항공사들은 단기간조차도 막대한 손실을

견뎌내기

에는 경영상태가 아주 좋지 않다.

[어휘] withstand 저항하다(resist, stand up against, stand up to); 버티다, 견디다(resist, hold out, bear)

② 앞으로 내놓다; 제창(주창)하다 ③ 나타내다, 상징하다; 지지하다 ④ 이해하다

[정답] ①

5. [번역] 비우호적인 러시아와 대결하리라는 전망은 다시 한 번 클린턴 행정부로 하여금 군사비 지출을 늘 리기(

강화하기

) 시작하도록 만들어 예산적자를 줄인다는 희망을 꺾어 버릴지도 모른다.