The already-moribund Korean economy is teetering on the brink of collapse as the power abuse scandal involving President Park Geun-hye’s longtime friend Choi Soon-sil is escalating. There are a flurry of warnings that the current situation may be similar to that before the currency crisis in 1997. It’s obvious that the economy will be adrift if it is left untouched.
Indicators already point to the serious state of the economy.
In its report on industrial activity for September, Monday, Statistics Korea said retail sales, a yardstick used to gauge consumption, fell 4.5 percent from a month earlier. This was the steepest decline in nearly six years. Industrial production in September also dropped 0.8 percent from August, marking the first month-on-month fall in five months.
The Federation of Korean Industries put its business survey index for November based on a survey of top 600 companies in sales at 89.8. The index has remained below 100 for six straight months since reaching a peak of 102.3 in May. Readings below 100 means pessimists outnumber optimists.
At a time when nearly half of Korea’s top 30 companies have been suffering from shrinking sales and profits, the production halt of Samsung Electronics’ Galaxy Note 7 has sent the manufacturing industry shivering with a sense of crisis.
Against this gloomy backdrop, the Choi Soon-sil scandal has brought state affairs to a standstill. Certainly, now is the time to unite to revitalize the economy, but the economic malaise is going from bad to worse amid the vacuum of political leadership.
Following Sunday’s abrupt reshuffle of her secretariat, President Park Geun-hye reportedly plans to shake up her Cabinet soon, including the prime minister. But given that it’s difficult to expect Park to perform her presidential role for the time being, confusion in administrative governance seems inevitable.
This means that the government’s economic team led by Strategy and Finance Minister Yoo Il-ho must be in the vanguard of coping with the looming economic debacle. Obviously, it’s about time for Yoo and other economic ministers to deal with national tasks according to the plan with a strong sense of responsibility and great teamwork.
Of course, active cooperation from political parties is essential for that. The opposition, in particular, must do its utmost to get to the bottom of the corruption and power abuse scandal. Simultaneously, however, it needs to provide support to the government’s moves to pass bills related to people’s livelihood and the nation’s growth potential, conscious of its increased responsibility in state affairs.