Gov't Short-Termism Could Ruin Korea

  • By Chousn Ilbo columnist Park Jung-hoon

    April 16, 2018 13:14

    Park Jung-hoon

    The government is minded to disclose potentially sensitive technological information by publishing an environmental assessment report from a Samsung semiconductor plant that workers have accused of poisoning them. Semiconductor and some other technologies are industrial secrets and heavily fenced around, and if any of them leak to the company's foreign competitors, it could mean Korea shooting itself in the foot.

    But viewed from the government's perspective, the move makes sense. It will take a few years before Chinese companies copy Samsung’s cutting-edge know-how, but a surge in approval ratings for protecting workers' rights is immediate. This kind of short-term thinking is sometimes known as PIMTOO (please in my term of office), a selfish practice of focusing only on short-term gains, especially at election time. All governments everywhere are guilty of the practice, but the Moon Jae-in administration seems to be glutting on it.

    There is also the NIMTOO (not in my term of office) way of thinking, where governments pass the buck to the next administration. A prime example of this is the reduction of weekly working hours, which includes a NIMTOO clause stipulating that, while the law goes into effect this summer, revisions accommodating business concerns will be prepared by 2022, when Moon is no longer in office.

    The government has also squandered taxpayers’ money on a move to shut down nuclear plants without a viable alternative in place, and hiking the minimum wage even as many small employers are struggling to make ends meet in the recession. It seems addicted to populist policies but quails in the face of necessary but unpopular ones. It is far more interested in quick results rather than tackling issues that will take time to solve.

    The centerpiece policy of this administration is job creation at the expense of taxpayers. The government is spending W6.7 trillion this year alone to create 500,000 jobs (US$1=W1,070). That boils down to a staggering W130 million per job. It intends to spend around W100 million on a single job earning just W30 million a year. This is absurd.

    Yet many of the jobs being created are only temporary ones. Last year, the government set aside a supplementary budget of W11 trillion to create 700,000 jobs, half of which were temporary jobs for senior citizens, like couriers and janitors. Many employers created such positions simply to get more government subsidies, and they will disappear the moment government funding ends. In a sense, it would be better simply to hand out cash to young jobseekers instead. This is supposed to go on until 2021, so the worst of the brunt will again be borne by the next administration.

    There are suspiciously many four-year policies floating about. For example, the government says it will not raise electricity fees for four years even if the nuclear power plants are shut down one by one. It also says health insurance fee will not be raised until 2021, even though Moon's plans to extend coverage will cost huge amounts of money. A signal trait of this administration is to tinker with budgets. It wants to tap into the government's W70 trillion housing fund to improve the availability of housing for those who do not own their home and the poor. It is also tapping into a W10 trillion employment insurance fund to create more jobs. This spending spree is affordable for the next four years, but no longer. About what will happen afterward the government has nothing to say.

    The shamelessness is staggering. Some say these lavish spending habits go back to the days when key members of this administration were political activists and members of left-leaning civic groups, who are used to spending other people's money and inexperienced in making money themselves. That may be unfair, but it is true that this administration's biggest weakness is preparing for the future. It prefers to spend rather than save, and to dismantle rather than build.

    Perhaps such policies stem from its populist mindset, and the belief that its 70 percent approval rating gives it the right to push ahead with anything it likes. It may revel in its popularity for four years, but then all of Korea will pay the price. Jobs will be cut, the engines of economic growth will sputter, and state coffers will be empty. History will be the judge of the performance of this administration, but in the meantime we need to be vigilant. Why is nobody afraid of what lies ahead?

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