The Korean Economy Train, which has been rushing into economic growth, is rapidly losing its speed. Some people point out that Korea is about to face a Japanese-style long-term recession. So, what should we do now? The author of the book, Where are we going now?, the former chief of Samsung Economic Research Institute and professor at KAIST Business School Ku-Hyun Jung, argues that the traditional economic growth model, which had contributed to the Korean economic development for last 60 years, is not effective these days. In his book, he asks individuals, firms and the government to make innovations for the next 15 years in order to facilitate a new growth engine.

According to Professor Jung, there are several signs of danger for the Korean economy. They include complacency, which comes after success, interest groups’ fixation on themselves, the lack of leadership that leads change, and the high-cost system. To deal with these problems, first of all, it is necessary to accomplish balanced growth between exports and imports, manufacturing and service industries, and small and large companies. We also need to prepare for the increase of female employment and aging workers due to the expansion and possible abolition of the retirement age. Fiscal policies should be enacted strictly to keep the combination of the aging phenomenon and the social welfare service from disturbing sound fiscal management.

Professor Jung also argues that the role of government needs to be reduced where the market economy is activated. Economic growth should be basically led by the private sector. Now the government is having a difficult time following through with economic strategies and/or industrial policies with its plan since Korea had joined the ranks of advanced countries. The Korean economy should start to remodel its overall structure before it’s too late. To ensure the safe arrival of the Korean Economy Train by 2027, it is critical for the government and the market to reestablish their roles and to improve efficiency.

By In-Koo Kim (clark@edaily.co.kr)

http://www.edaily.co.kr/news/NewsRead.edy?SCD=JI31&newsid=01177526602909616&DCD=A403&OutLnkChk=Y