Park warns of possible crisis again

President Park Geun-hye bangs the gavel during the last Cabinet meeting of 2015 at Cheong Wa Dae, Tuesday. / Yonhap

President seen going too far to persuade politicians

By Kang Seung-woo

President Park Geun-hye warned Tuesday that the nation’s sovereign credit rating could be downgraded if the government’s labor and economic reform drive fails due to a lack of support in the National Assembly.

This is the latest in a series of strongly worded demands that Park has issued to get the Assembly to pass pending bills relating to the economy and labor despite criticism from liberal politicians that she is unnerving the public by repeatedly talking about possible crises.

“Should the nation’s reformative efforts struggle, we will lose the trust of the international community,” Park said during the last Cabinet meeting of the year at Cheong Wa Dae.

“The recent credit rating upgrade reflected the international community’s trust in the nation’s reform plans as well as our economic achievements in the past three years.”

On Saturday, Global rating agency Moody’s upgraded Korea’s sovereign credit rating to Aa2 from Aa3, the highest-ever rating it has received from an international credit rating agency.

At that time, Moody’s said that the key drivers of the upgrade are Moody’s expectations that Korea’s credit metrics will remain strong and resilient and that Korea’s institutional strength will support continued implementation of structural reforms.

“Moody’s said that it had upgraded the credit rating, believing that Korea will pull off structural reforms, but at the same time, it is a warning that the rating will be lowered again if the reform drives falter,” Park said, recalling that Moody’s was the first global agency to downgrade Korea’s rating to the speculative grade, Ba1, during the 1997 Asian financial crisis.

“This is the final opportunity for reform, or we will lose their trust and Korean companies will have trouble doing business on the global stage.”

Park’s warning is the latest call for the National Assembly to pass labor reform bills that she believes will contribute to creating jobs for young people and help revive the sluggish economy. The jobless rate for those aged from 15 to 29 reached 8.1 percent in November, up from 7.4 percent a month earlier.

In September, labor, management and the government reached a landmark deal to ease labor restrictions to allow companies to dismiss workers who are either negligent or underperforming. However, no follow-up measures have been taken as related bills were pending in the parliament.

Despite the President’s repeated appeals, the main opposition New Politics Alliance for Democracy claims that the reforms could further place irregular workers at further disadvantage.

“Labor reform bills will create 370,000 jobs and revitalize domestic demand, but it is regrettable that those bills are still pending at the National Assembly,” she said.

“Witnessing business leaders, especially small- and mid-sized businessmen, appeal for the bill passage, I was not comfortable with them.”

On Friday, Park held a meeting with local business leaders at Cheong Wa Dae.

At the same time, Park called on the parliament to pass a bill for university structural reform, aimed at strengthening competitiveness in higher education.

“The law will help the government reduce the number of university students and close schools based on evaluations,” Park said.

This was the first time that the President has called on the parliament to pass the bill for university reform.