By Choi Sung-jin
"When was the last time you made a report about overall economic situations to the President?" Rep. Yoo Seong-min of the ruling Saenuri Party asked Deputy Prime Minister Yoo Il-ho during a parliamentary audit last Friday.
The latter Yoo, who doubles as finance minister, said he has made frequent reports but through presidential aides at Cheong Wa Dae.
"This is the time for the government's top policymaker to talk with President Park Geun-hye directly," said Rep. Yoo, former floor leader of the governing party. "You should advise the chief executive to preside over an emergency economic committee to handle the current crisis."
This conversation showed how deeply permeated is a sense of economic crisis even among the ruling party leaders and how frustrated they feel about the lack of leadership to tide the country over in tough economic times.
Not only experts but ordinary people have begun to talk about the crisis: Samsung Electronics and Hyundai Motor, the two core players in Corporate Korea, are being shaken from the bottom, exports are plunging and traditional industries such as steel and shipbuilding require swift restructuring, but there are few officials or ideas seen to be dealing with multiple troubles.
The Bank of Korea has readjusted its growth projection for next year to 2.8 percent -- down 0.1 of a percentage point from the previous forecast -- the fourth consecutive such trimming from 3.2 percent it targeted early this year.
Economic affairs, however, remain low in the administrative priority list of President Park, who has been bent on pressuring North Korea on its nuclear development programs, not finding time even to meet her economic czar for talks, critics say.
The economic administration has come to a virtual standstill.
The government had promised to announce measures to resolve shipping and shipbuilding problems in September but is yet to keep its word. Watching Park's economic team deal with the troubles of Hanjin Shipping and Daewoo Shipbuilding and Marine Engineering, many analysts say they can't help but recall the former Kim Young-sam administration's poor handling of the bankruptcy of Hanbo Steel in January 1997, which led to a worse financial crisis 10 months later.
Some say Korea is in a more dangerous situation now than two decades ago, citing the simultaneous attacks of national security and economic crises and lamenting the lack of systematic responses by the government. Nor does the incumbent administration have a future strategy to prepare for, say, the fourth industrial revolution.
Debt-stricken working-class families are tightening their belts further, with household debts swelling to 1,257 trillion won ($1.1 trillion) in the second quarter to surpass 90 percent of gross domestic product for the first time while disposable income remains stationary.
According to Korea Investment and Securities, Koreans' average propensity to consume -- the proportion of consumption expenditure out of total income -- fell from 77.9 in 2005 to 70.9 in the second quarter, indicating private consumption has contracted even compared with a decade ago.
Statistics Korea also said the number of "ultra-short-term workers" -- those who work only one to 17 hours a week -- totaled 1.34 million in the third quarter, up 140,000 from a year earlier, to hit the highest in five years. That the number jumped 244,000 and 143,000 in 1998 and 2009, respectively, suggests the present economic slump is as serious as those during regional and global financial crises.
Even more serious for the incumbent administration is its loss of popular trust.
According to national competitiveness rankings made by the International Institute for Management Development, almost all government-related indexes fell over the past year. Transparency of policy dropped from 40th to 43rd and policy appropriateness from 45th to 46th.
In similar World Economic Forum rankings, Korea fell from 80th to 82nd in government employees' decision-making favoritism, from 66th to 69th in appropriation of public funds and from 46th to 52nd in irregular payment or bribery.
According to Organization for Economic Cooperation and Development data, only 17 percent of people aged 19-25 trusted their government in 2015, putting the nation in 42nd place out of 43 countries in this category.
Some of the most unpopular policies were the tobacco price increase, an indirect tax, while refusing to raise corporate tax rates, making it easier for businesses to dismiss their employees and introducing a performance-based pay system, another pro-business policy.
"As things stand now, the Park Geun-hye administration is highly likely to leave the worst economic report card of all governments," a conservative daily said in an editorial Tuesday. "Most Koreans no longer hope their President will change her governance style but do her best in economic administration even during the rest of her tenure."
"When was the last time you made a report about overall economic situations to the President?" Rep. Yoo Seong-min of the ruling Saenuri Party asked Deputy Prime Minister Yoo Il-ho during a parliamentary audit last Friday.
The latter Yoo, who doubles as finance minister, said he has made frequent reports but through presidential aides at Cheong Wa Dae.
"This is the time for the government's top policymaker to talk with President Park Geun-hye directly," said Rep. Yoo, former floor leader of the governing party. "You should advise the chief executive to preside over an emergency economic committee to handle the current crisis."
This conversation showed how deeply permeated is a sense of economic crisis even among the ruling party leaders and how frustrated they feel about the lack of leadership to tide the country over in tough economic times.
Not only experts but ordinary people have begun to talk about the crisis: Samsung Electronics and Hyundai Motor, the two core players in Corporate Korea, are being shaken from the bottom, exports are plunging and traditional industries such as steel and shipbuilding require swift restructuring, but there are few officials or ideas seen to be dealing with multiple troubles.
The Bank of Korea has readjusted its growth projection for next year to 2.8 percent -- down 0.1 of a percentage point from the previous forecast -- the fourth consecutive such trimming from 3.2 percent it targeted early this year.
Economic affairs, however, remain low in the administrative priority list of President Park, who has been bent on pressuring North Korea on its nuclear development programs, not finding time even to meet her economic czar for talks, critics say.
The economic administration has come to a virtual standstill.
The government had promised to announce measures to resolve shipping and shipbuilding problems in September but is yet to keep its word. Watching Park's economic team deal with the troubles of Hanjin Shipping and Daewoo Shipbuilding and Marine Engineering, many analysts say they can't help but recall the former Kim Young-sam administration's poor handling of the bankruptcy of Hanbo Steel in January 1997, which led to a worse financial crisis 10 months later.
Some say Korea is in a more dangerous situation now than two decades ago, citing the simultaneous attacks of national security and economic crises and lamenting the lack of systematic responses by the government. Nor does the incumbent administration have a future strategy to prepare for, say, the fourth industrial revolution.
Debt-stricken working-class families are tightening their belts further, with household debts swelling to 1,257 trillion won ($1.1 trillion) in the second quarter to surpass 90 percent of gross domestic product for the first time while disposable income remains stationary.
According to Korea Investment and Securities, Koreans' average propensity to consume -- the proportion of consumption expenditure out of total income -- fell from 77.9 in 2005 to 70.9 in the second quarter, indicating private consumption has contracted even compared with a decade ago.
Statistics Korea also said the number of "ultra-short-term workers" -- those who work only one to 17 hours a week -- totaled 1.34 million in the third quarter, up 140,000 from a year earlier, to hit the highest in five years. That the number jumped 244,000 and 143,000 in 1998 and 2009, respectively, suggests the present economic slump is as serious as those during regional and global financial crises.
Even more serious for the incumbent administration is its loss of popular trust.
According to national competitiveness rankings made by the International Institute for Management Development, almost all government-related indexes fell over the past year. Transparency of policy dropped from 40th to 43rd and policy appropriateness from 45th to 46th.
In similar World Economic Forum rankings, Korea fell from 80th to 82nd in government employees' decision-making favoritism, from 66th to 69th in appropriation of public funds and from 46th to 52nd in irregular payment or bribery.
According to Organization for Economic Cooperation and Development data, only 17 percent of people aged 19-25 trusted their government in 2015, putting the nation in 42nd place out of 43 countries in this category.
Some of the most unpopular policies were the tobacco price increase, an indirect tax, while refusing to raise corporate tax rates, making it easier for businesses to dismiss their employees and introducing a performance-based pay system, another pro-business policy.
"As things stand now, the Park Geun-hye administration is highly likely to leave the worst economic report card of all governments," a conservative daily said in an editorial Tuesday. "Most Koreans no longer hope their President will change her governance style but do her best in economic administration even during the rest of her tenure."
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