As of Friday, Lee Hun Jai will have been deputy prime minister for finance and economy for a full year. There have been ups and downs, but the accomplishments of a year's worth of effort to revive the economy are relatively positive. But there were mistakes made in the course of concentrating on reviving the economy, in the way that hurt consistency of policy and turned back the reform effort. Now the more important task is managing the uneven economy and putting it on the right track, one that is safe.
Most important will be measures for dealing with the stock and real estate markets, which are each in a state of rapid rise.
There are numerous items on the stock exchange that have had prices shoot up twice what they were at around the end of last year. Stock prices affect a recovery in consumer psychology more than anything else and there's nothing wrong with a rise in prices. But the problem is that when the rise is too great over too short a period, the trend does not last long. The stock market must not be influenced by any desire to hastily revive the economy. Rather what is needed is policy that seeks to stabilize the skyrocketing prices while continuing the overall rise.
These concerns are even more valid when it comes to the real estate market, which by nature goes out of control once it begins to get heated up. There are already signs of that happening in Seoul's Gangnam neighborhood. Encouraging the construction industry in order to stimulate the economy is good, but if that leads to a sharp rise in apartment housing, far more is lost than gained. The government must not take an easygoing attitude here, believing that it should not interfere with a market that is just picking up. The real estate market urgently requires policy that is one step ahead of it all.
The issue of consistency and principles in policy must be looked at again. Sustained growth is impossible without consistent structural reform. Lee has to keep from falling into the temptation to have the economy climax while he is in office by bending the principles a little. Building the basis for long term, stable growth is more important, even if a complete recovery is not achieved. Doing that will require more effort in the area of structural reform.
The Hankyoreh, 7 February 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Lee Hun Jai Must Work For Structural Reform |
