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Finance Minister Kwon O-kyu claims that he had never benchmarked the Swedish welfare state as a model for Korea. He even said that Sweden¡¯s historical background is so different from Korea's that it was impossible from the beginning to pursue the Scandinavian welfare state as a model for Korea¡¯s economy.
While he was serving as Korea¡¯s ambassador to the Organization for Economic Cooperation and Development (OECD) in December of 2005, Kwon sent the president a report analyzing Sweden's welfare system, pointing out the need for Korea to learn how the Scandinavian country manages to maintain its economic competitiveness even though Swedes hand over more than 50 percent of their income to taxes.
This administration, which had been fixated on the Swedish welfare model for some time, posted the report on the website of Cheong Wa Dae. Kwon¡¯s "meritorious" action of gauging the preference of this administration and promptly sending the report to the presidential office probably played a role in his appointment as finance minister.
The president said Sweden was not only respected by Koreans, but stood as a model for Korea. Sweden served as a reference book for President Roh Moo-hyun¡¯s policies. Officials in the Roh administration cited Sweden as an example to support their policy decisions whenever they faced criticism. But now, the finance minister who put together the report on Sweden is taking a passive stance and saying the two countries are too different. He has changed his position. He has admitted that the government had been wasting its time on an unrealizable objective over the last five years.
Realistically speaking, even Sweden has abandoned the "Swedish welfare model." Since center-right politicians won parliamentary elections in 2006, Sweden has been pursuing a new model, seeking to emerge from its ¡°welfare trap¡± that has made people less willing to work while failing to create jobs.
Kwon said left-wing officials (including scholars and the former activists who ended up at the presidential office) had focused only on the results of the Swedish model, where high economic growth was possible despite high taxes and comprehensive welfare coverage. When asked why he did not bother to give the entire picture of the Swedish welfare model and refute their views, Kwon said he did not want to step forward. He sat and watched as his report served as the impetus for his country to head in the wrong direction. We should consider it fortunate and even miraculous that our economy did not collapse altogether during the five years of the Roh administration.
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