The nation ushers in 2019 amid deepening concerns over the sagging economy and the stalled process of North Korea’s denuclearization.
The economy is suffering from a simultaneous decline in output and investment, with unemployment and income inequality worsening continuously.
The North appears to be upgrading its nuclear capabilities, while balking at denuclearization talks with the US and pressing the South to be more active in going ahead with inter-Korean projects.
By adhering to policies criticized for being detached from reality, President Moon Jae-in’s administration bears a great deal of the responsibility, although not all, for the situation that now worries most South Koreans.
Unless the Moon government departs from an approach based on wishful thinking, rather than on facts on the ground, there is little chance the country will be put on a better economic and security footing in the year to come. It should be reminded that heightening uncertainties in external conditions mean that misguided policies carry far greater risks.
Global economic growth is forecast to slow in 2019. This would dampen South Korea’s exports, which have shored up Asia’s fourth-largest economy in recent years. The country would take a sizable hit from an escalation in the trade war between the US and China, which is in a temporary truce while the world’s two largest economies have one last attempt at talks to settle their differences.
US President Donald Trump’s precariousness, especially after the exit of his prudent defense secretary, James Mattis, raises uncertainties over Washington’s approach to Pyongyang. He may rush to conclude a deal in return for initial progress in the process of denuclearizing the totalitarian regime or go back to military options to resolve the standoff if denuclearization talks continue to be stalled.
Furthermore, the Trump administration’s ability to get things done would be crippled if the Democrats, who took control of the House of Representatives in last year’s midterm elections, opted to impeach Trump, depending on the outcome of the special counsel’s investigation into the connection between Russia and Trump’s 2016 election campaign.
Growing voter discontent
The continuous fall in President Moon’s approval rating reflects voters’ growing discontent with the way his administration has handled state affairs, particularly economic issues.
In the latest survey, announced last week, 51.6 percent of respondents said Moon was doing a bad job, marking the first time a majority of voters made a negative assessment of his performance since he took office in May 2017.
Moon has recently shown signs that he is shifting the focus of his economic policies, which have hurt lower-income families while dampening corporate activities.
But wide discrepancies remain between his pro-corporate rhetoric and what his administration has actually done.
His call for measures to help boost corporate activities has been followed by a long list of antibusiness moves such as revising the commercial code to put tighter restrictions on management and the attempt to push large companies to share profits with subcontractors.
The Cabinet last week approved a rule that would effectively increase the minimum wage, only days after he mentioned the need to take complementary steps to the effect of lessening burdens on employers.
Despite his repeated pledges to push for drastic deregulation, little headway has been made on regulatory reforms, which are essential to restore the competitiveness of manufacturing industries, promote the service sector and forge new growth engines.
Top policymakers have pledged to continue to push for the income-led growth policy this year, dismissing the criticism that the misguided approach reliant on expanding fiscal spending has only worsened economic conditions and further disadvantaged low-income earners.
Over the past year, the country has seen its unemployment rate rise to the highest level in 18 years, its factory utilization rate drop to the lowest in two decades and income inequality reach a record high.
Such data mean there is no longer any room to wait for Moon’s policies to reap their intended results.
Unless he takes the lead in resolving confusion over the course of his administration’s policy by keeping it in line with reality, Moon will find himself further alienated from the public throughout his third year in office.
The gulf between his view and actual developments is also widening on the issue of North Korean denuclearization.
A recent report by a US broadcaster highlighted the possibility of Pyongyang retaining about 100 nuclear warheads by 2020 if it maintains the current pace of production as expected by most experts in Western capitals. After his first summit with North Korean leader Kim Jong-un in April, Moon delivered to Trump a promise that he said had been made by Kim to complete the North’s denuclearization by that year, when Trump’s first four-year term ends.
Moon’s efforts to achieve “lasting peace” on the peninsula would look hollow and even dangerous, if Pyongyang turned out to be just shifting from nuclear and missile tests to the mass production and deployment of nuclear bombs with improved reliability.
His government might be stuck between a nuclear-armed North Korea and a fraying alliance with the US, if it continues to be eager to provide assistance to the North rather than keeping in step with international efforts to tighten sanctions on the recalcitrant regime.
Moon and his aides should step out of their ideological framework dating back decades to the time they protested military-backed authoritarian regimes in this country. They should no longer be captured by the delusions distancing themselves from changes in the economic and geopolitical environments.
Their most urgent task is to equip themselves with practicality and expertise, which would probably require them to be more courageous and diligent than they have ever been in the course of reaching where they stand now.
The growing scandal over the alleged surveillance of civilians by special inspectors from the presidential office, which is threatening to rattle the moral grounding of the Moon administration, should not bind it further to its unrealistic stances under the increasingly superficial pretext of justice and fairness.
The Moon government’s failure to turn from a delusional and ideological pursuit to a substantial and realistic approach might run the risk of pushing the nation to the verge of economic and security cliffs. There is too much at stake for it to insist on staying the course.