What Yoon has done over the past 17 months is far from desirable.ĭuring the election campaign, Yoon's two keywords were fairness and common sense. Most Koreans understand what their country needs in the long term, but are unwilling to accept short-term losses to get there. Rhee then called for structural reforms, saying the choice lies with the people and politics. Most experts do not regard the nation's long-term outlook as being bright, either.īOK Governor Rhee Chang-yong has long maintained that Korea entered a low-growth phase, citing the country's low birthrate and rapidly aging population. Therefore, it will not turn to pump-priming measures. The government is prioritizing fiscal soundness as its utmost goal. The BOK can neither lower nor raise its policy rate as it is sandwiched between sluggish growth and lingering inflation on the one hand and hefty private-sector debt on the other. Last Thursday, the Bank of Korea froze its benchmark interest rate for the sixth straight month. To overcome a short-term slump, governments usually mobilize all steps available, mixing monetary and fiscal policies. Abroad, global political uncertainties expose Korea to even bigger external risks and problems. On the homefront, household debt and property bubbles reduce the room for policymaking. Economic forecasters say Korea will remain in the doldrums for a long time. The nation's growth rate is the lowest it has been since the 1997 Asian financial crisis and the 2008 global financial crisis. faces one of its darkest economic moments. These reforms are faltering at a time when Korea Inc. Education reform has yet to take the first step amid rising confusion about the college entrance system. The limbo will likely continue until after the parliamentary polls next April. Pension reform is also drifting into a gridlock because the government cannot persuade people to pay more yet receive less. Behind the failure is Yoon's unwarranted pro-business policy and hatred of center-left unionism. Now, even the more moderate of the two umbrella unions refuses to talk with the government. However, its attempt to introduce a maximum 69-hour workweek and demand more accounting transparency by large unions led to resistance against labor repression. The Yoon administration tried to enhance labor market flexibility and address the excessive power of labor unions.
However, none of these structural reforms are getting anywhere. Upon taking office 17 months ago, President Yoon Suk Yeol vowed to reform three areas: labor, pension and education, in order to ensure Korea's long-term growth. Drifting reforms : Yoon must look beyond parliamentary elections
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