Strong Leadership

Janet Yellen smiles before being sworn in as Federal Reserve Board chair at the Federal Reserve in Washington, DC, on Feb. 3, 2014.
Janet Yellen smiles before being sworn in as Federal Reserve Board chair at the Federal Reserve in Washington, DC, on Feb. 3, 2014.

 

Amidst ominous international financial market trends last February, Korea had the honor of receiving an unexpected compliment  by newly-inaugurated “Global Economic President” Janet Yellen, chair of the Federal Reserve Board (FSB). Through a report submitted to the House, Korea was assessed as being successful in differentiating itself, as it reported that the “Korean economy’s weakness shows the least vulnerability among 15 emerging markets.” Jumping at the opportunity, Minister of Financial Planning Hyun Oh-seok, replied, “Our economy has completely changed. The FRB and foreign media unanimously diagnose that Korea has the upper hand in crisis management capabilities.”

Has Korea really changed? The answer is negative. As of 2013, Korea ranked 22nd three years in a row in international competitiveness charts annually published by the IMD, International Institute for Management Development in Switzerland.

The macro-index barely saved its ranking, since corporate management and educational infrastructure has deteriorated. Corporate management activities and labor management productivity ranked 50th and 56th, respectively, staying in the lowest bracket among 60 nations. Social infrastructure did not perform well either, as the number of elementary students per teacher and apartment rental ranked 51st and 52nd. It seems that the internal economy cannot keep up with this facade in its strength.

The growth-oriented Korean economy repeatedly showed splendid development. Last year’s trade surplus achieved a glamorous “triple Crown,” meaning that it secured the record high surplus over US$1 trillion last year, for the three consecutive years, despite the ripples from the financial crisis. Its global status has heightened as global businesses established themselves solidly whereas Hanryu (Korean Wave) is going worldwide.

However, a closer look at the inside will show you how Korea has hit its plateau.

Overall social elasticity has dropped due to existing powers and rampant regulations, while a sense of deprivation has reached its peak as the gap between the rich and poor widens.

Even the economic aspect has revealed a handful of problems. Big corporate dominance has led to more severe lopsidedness, stemming from a monopolized system since industrialization. While industrialized nations are heading toward municipality-oriented systems, Korean municipalities are suffering from a lack of independence. The percentage of elderly has increased in society because of marriage avoidance and low birth rates, while the economy is losing its luster due to household debts exceeding 1 quadrillion won. “We need to prepare ourselves for the downward spiral, since Samsung’s growth will halt at some point,” warned a professor at a private university.

But the bigger issue at hand is the unlikelihood of finding a political leader that will find the breakthrough. Politicians only look out for themselves, and governmental policies repeatedly turn out to futile. Korea’s underprivileged are becoming an overwhelming problem in society as it sinks deeper without a social safety net.

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