ID :
192021
Thu, 06/30/2011 - 12:14
Auther :
Shortlink :
https://oananews.org//node/192021
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No time to waste in resuscitating people's economy
SEOUL, June 30 (Yonhap) -- The main second-half economic policy announced by the government Thursday is designed to alleviate the hardships of low-income people. The real-life living conditions for these people have not improved as economic growth has been concentrated around export-leading conglomerates, widening the gap between large and small firms. The second-half economic policy, the government said, will focus on narrowing the gap and curbing inflation while increasing employment and domestic demand. This reflects the realization of the problems that low-income people are facing.
The government has given up its initial ambition to achieve growth simultaneously with inflation control. It adjusted down its growth outlook from 5 percent to 4.5 percent, while upping its inflation forecast to 4 percent from 3 percent. The notion of stabilizing prices before boosting domestic demand and employment sounds positive.
But micro policies will have limits. The revised inflation rate target is proof that first-half price stabilization measures did not work. Inflationary pressure is coming from both supply and demand sides, fueled by factors such as raw material prices and housing rent. International oil and other core prices are still unstable. We hope that the government will utilize macro policies, such as interest and exchange rates, to cap inflation.
Business sentiment for domestic enterprises is said to be worsening fast from the second quarter, especially compared to that of exporting firms. The conditions could get even worse with consumers shutting their purses because of household debt exceeding 800 trillion won. Without improving domestic consumption, the recovery of the people's economy will be elusive. The latest government policy may yield results in the short term, but the prevalent view is that it will not provide fundamental solutions because of a lack of advancement in the nation's service industry, which has the biggest potential in creating jobs.
The development of the service industry has been stalled because of conflicts between interest groups and rivaling ministries. The second-half economic policy includes a renewed pursuit to improve the service industry, but provides no clear picture of how to achieve this goal. It goes without saying that the shortcut to resuscitating the people's economy is job creation. Nurturing and deregulating the service industry is all the more urgent. There is no time to waste.
The government has given up its initial ambition to achieve growth simultaneously with inflation control. It adjusted down its growth outlook from 5 percent to 4.5 percent, while upping its inflation forecast to 4 percent from 3 percent. The notion of stabilizing prices before boosting domestic demand and employment sounds positive.
But micro policies will have limits. The revised inflation rate target is proof that first-half price stabilization measures did not work. Inflationary pressure is coming from both supply and demand sides, fueled by factors such as raw material prices and housing rent. International oil and other core prices are still unstable. We hope that the government will utilize macro policies, such as interest and exchange rates, to cap inflation.
Business sentiment for domestic enterprises is said to be worsening fast from the second quarter, especially compared to that of exporting firms. The conditions could get even worse with consumers shutting their purses because of household debt exceeding 800 trillion won. Without improving domestic consumption, the recovery of the people's economy will be elusive. The latest government policy may yield results in the short term, but the prevalent view is that it will not provide fundamental solutions because of a lack of advancement in the nation's service industry, which has the biggest potential in creating jobs.
The development of the service industry has been stalled because of conflicts between interest groups and rivaling ministries. The second-half economic policy includes a renewed pursuit to improve the service industry, but provides no clear picture of how to achieve this goal. It goes without saying that the shortcut to resuscitating the people's economy is job creation. Nurturing and deregulating the service industry is all the more urgent. There is no time to waste.
