"Study overseas" and "foreign travel" have become familiar terms. It is easy to see fathers who have sent their wives and children overseas to study while they stay and work, and traveling abroad to play golf is no longer something just for the rich. Figures released Thursday by the Bank of Korea (BOK) suggest there are serious issues about the country's international balance of payments last year. The imbalance resulting from travel and study overseas totaled W95.5 billion. That is close to W10 trillion. What is particularly notable is the rate at which the imbalance is increasing. Last year it was 54 percent higher than in 2004.
Something has to be done to turn the situation around. If the trend continues it will not only hurt the domestic consumption that grows the economy, it will also become hard to narrow the gap between the economic indicators and how the economy feels to the common people. In 2005, overseas travel and study accounted for 2.7 percent of the consumer spending total of W359 trillion. It has already reached the point where it could become a major obstacle to restoring domestic consumption, and if the rate of increase continues it stagnation in consumer spending could become the norm. It is a serious matter for the current balance of accounts as well. The balance of accounts is doing alright because exports are in good shape, but if the trend towards increase exports slows down, the imbalanced resulting from personal spending overseas will be a major burden.
Many factors seem to have acted together. The fact that people are dissatisfied with the condition of education and that the country lacks adequate and inexpensive leisure and recreational facilities contributes to the problem in a big way. The country needs to begin by having policy and regulations give people less reason to want to go overseas. In addition, people need to take a close look at the situation and see if perhaps there are other factors in the rapid increase in people leaving for study and travel. When the gross national income (GNI) increases it is only natural that people spend differently. But if the trend is going out of bounds the government needs to take a close look at the causes and formulate measures to fight it. It should put measures in place when the current balance of accounts is in good shape and when the economy is in recovery. When the government postpones responding to the situation it tends to come up with measures that don't make sense.
The Hankyoreh, 27 January 2006.
[Translations by Seoul Selection]
[Editorial] Higher Overseas Travel and Study Expenditures |
