South Korea must set new agenda to restore economy

Annual economic growth falling short of 5 percent is anathema to the nation's top economic policymakers. Lee Hun-jai, deputy prime minister for economic affairs, says such a prospect is unthinkable to the administration.

The reason is simple. The administration believes it is impossible to create 400,000 to 500,000 jobs a year, supposedly the bare minimum needed to push unemployment down to a tolerable level, if the growth rate dips below the 5 percent mark.

The deputy prime minister reaffirms the administration will deliver on its promise to generate growth beyond the 5 percent level, both this year and in 2005. But the renewed promise sounds hollow, with the International Monetary Fund and the Asian Development Bank predicting lower growth rates.

The IMF has recently lowered its April growth forecast of 5.5 percent for this year to 4.6 percent and that of 5.3 percent for 2005 to 4 percent. More pessimistic is the ADB, whose growth projection for next year is 3.6 percent, down from 5.2 percent in April. These somber forecasts are shared by domestic economic research institutes.

These decimal changes may look insignificant or arcane to laymen, but lawmakers who went home to their constituencies during the Chuseok holiday, have now learned what they can mean in real life. They report that many voters were not just unfriendly but hostile, angry about debts that keep piling up, dwindling income and job losses.

Of course, their anger is directed against President Roh Moo- hyun, his administration, the ruling Uri Party and, to a lesser extent, the political community as a whole. As they correctly note, the administration and the party are not paying much attention to the worsening quality of their life.

Instead, they are preoccupied with not-so-urgent policy goals, such as the rewriting of history, repealing the National Security Law and relocating the capital.

The pursuit of those goals and the efforts for economic recovery may not be mutually exclusive, as the ruling party claims. Yet, it is an undeniable fact that those issues have already become a focal point of fierce contention between the ruling and opposition parties and, by extension, between the liberals and the conservatives. Their cutthroat fight is draining national energy.

If the ruling party does not want to alienate voters any further, it will have to set the national political agenda anew and refocus on economic recovery. It needs to boost aggregate domestic demand by encouraging consumer spending and corporate investment.

It has little time for vacillation. It now has to develop action plans together with the administration. That is what it needs to do if it wishes to win over voters whose sentiment against it is worsening.