Time for 'Korexit'

By Choi Sung-jin

Over the past two decades, neo-liberalism and its core concepts of unfettered trade, market supremacy and limitless competition have been the golden rules for Korea’s governing elite.

So, the Britons’ choice two weeks ago to leave the European Union came as a spiritual shock of sorts for this country’s establishment that dominates politics, business, academia and the media. They seem at a loss about how to explain the setback of globalization in nowhere else than its birthplace, and by its biggest beneficiaries.

There were of course elements of political instigation by irresponsible populists amplifying fears of immigrants, leading to emotional decisions by people who felt they were alienated by globalization’s benefits. And these are the same senses of insecurity widespread among poor white Americans who support xenophobic, neo-isolationist Donald Trump regardless of the presumptive Republican candidate’s suitability as a real leader.

What all this indicates is clear: deglobalizing trends across the Atlantic, summed up by Brexit and Trumpism, are not about nation but about class, at least economically.

Many working-class Koreans, however, might feel like saying to their American and British counterparts, “You should count your blessings and stop complaining.” After all, they are living in the world’s largest and fifth-largest economies with per capita gross domestic product (GDP) 2.1 times and 1.7 times larger than Korea’s, respectively, and far wider and tighter social safety nets than what we have here.

Few can deny Korea, as a whole, had been a big beneficiary of free trade until the mid-1990s. It is no less true, however, that Koreans ― except for a handful of the political and economic elite ― have been some of the biggest victims of economic globalization thereafter. Since the 1997 Asian financial crisis, the nation’s economic polarization has become next only to America’s as family-controlled conglomerates strengthened their grip on the national economy. Just two numbers ― the highest suicide rate and lowest birthrate in the world ― make it difficult to deny Korea has somehow become the least livable country on the globe.

The future ― and what our leaders do in the future ― is of course far more important than the past.

For this reason, however, most Koreans, at least 90 percent of them, do not seem to have much hope for their future. In the United Kingdom, not only Brexiteers but also Bremainers will try to reflect the complaints of the alienated classes on their future policies. Also, even if Hillary Clinton is elected as the first female president of the United States, she will hardly be able to ignore Trump’s supporters and their demands, reviewing, if not rescinding, free trade agreements and trying to revive the middle class by increasing the income of poor people during her first few years in office. Koreans can seldom expect similar changes for probably the next year and a half.

Yes, Korea is a small, open economy that still has to rely considerably on exports for growth but the nation will need a far better balance between foreign shipments and domestic consumption. However, initial responses to Brexit indicate that President Park Geun-hye and her administration are yet to grasp correctly what the ongoing trends in America and Europe signify: a shift of relative priority from businesses to workers and from freedom to equality. Yun Byung-se, Park’s top diplomat, might be the first, and so far the only, foreign minister in the world who showed the alacrity of calling for free trade talks with Britain. Whether or not London has any time to care about it, at stake now should not be more or quicker free trade accords but revising the existing ones to Korea’s advantage.

President Park still reiterates her two economic catchphrases whenever possible ― deregulation and a flexible labor market, also two of the key neo-liberalistic mantras. She is doing so even after most Koreans watched how the reckless removal of essential regulations has resulted in the loss of numerous lives at sea and even in rooms of ordinary households. Also, the chief executive “still” believes in the non-existent trickle-down effects, not knowing, or admitting, the economic growth made by helping managers sack their employees more easily and replace full-time staff with part-timers and contract workers will only fatten the pockets of family-controlled conglomerates rather than improving the lives of numerous working-class families.

The daughter of the general-turned-president who spearheaded the rapid growth through the concentration of scarce capital on a few selected players decades ago does not know, or admit, the old-growth formula has long ceased to work. This is the time to shift from accumulating capital to upgrading the productivity of capital, or from expanding investment by tightening the belts of people and swelling the profits of businesses to reproducing a population armed with better knowledge and proficiency. President Park cannot materialize her slogan of a “creative economy” by setting up “creativity centers” in each of the 16 provinces and metropolises but by allowing people to become more creative and less afraid of failure by providing imaginative education and better social safety nets.

This transition cannot happen without investment in people through more equal redistribution and a better-working welfare system, which Park promised in her campaign pledge of “economic democratization” but did not keep after her election.

What will happen halfway across the globe in the next few years will be the reminder for Korea to create a new economic framework. “Korexit” should be an escape from neo-liberalism and its varied myths whose days expired a long time ago.

Will Korean voters see such politicians, liberal or conservative, next year?

Choi Sung-jin is The Korea Times’ senior writer. Contact him at choisj@ktimes.com.