firmly in place has been confirmed through an abundance of historical evidence.
Let's achieve another miracle with business-friendly policy
But it seems we're heading towards a wrong direction. Lee Myung-bak won a landslide victory in the presidential election with the so-called "747" campaign pledges: to grow the economy by 7 percent per year, achieve $40,000 per capita income within a decade, and make South Korea one of the world's seven biggest economies. But the promises have disappeared. The "business-friendly" philosophy for the economic growth has been replaced with the populist "for-the-poor neutral and practical" policy stance. The government appears to have no interest in economic growth. What would South Korea look like in 10 or 20 years if we continue to compromise with our future? Are we capable of coping with a sudden collapse of the North Korean regime? Can we confront the challenges of the fast-growing China and Russia? We can survive these threats only when our economy grows by 7 percent per year.
To achieve such a fast growth, every citizen should fully display one's potential. Each of the people should use his or her ability to the maximum and produce the world's best goods and services. They also have to export them as much as possible and increase their global market share. Only then, we can enjoy another miracle of impressive growth as seen during the 1970s and 1980s. Fast growth can be achieved only when all of the people try their best for better life. Complaints and discontents never bring about a miracle.
We used to work very hard in the past. Since the 1960s, we began our struggle to escape from the "han" or deeply-rooted resentment that haunted our ancestors for the past 5,000 years. We still had nothing in our hand but began to believe that we should achieve something and that we could do it. The growing optimism and confidence has brought a number of enterprises and business heroes.
But we're in a different mood now. Although we're far richer than before, we hear more complaints about poverty. We're less willing to venture into new businesses but rather want to live a comfortable life without much effort and just by relying on others.
The unemployment issue clearly shows the tendency. Jobless people complain that there are no jobs for them but a lot of small- and mid-sized companies have troubles in finding workers. Many people have chosen to stay idle, rather than going to the small firms. They are reluctant to try their chances in small companies and look for only high-paid jobs in vain.
It's up to an individual whether he believes staying idle is better than having a hard job. But this is a very pitiful choice. Rather than staying at home and squandering parents' money, he would produce something if he works even for a small business. And his output will be used by others. In short, you can contribute to the world by working. But staying idle will waste one's potential and it's nearly a sin as it wastes one's ability that can be used for the world.
The phenomenon gains more ground as most Korean parents provide financial supports for their grown-up children so that they could stay idle. To the young people, relying on their parents is far better choice than getting an ordinary job. The parents are growing a generation that fritters away the wealth of the past, rather than contributing to the world through work.
The role of a leader is very critical at this moment. Political and social leaders should come out to scold the young people for staying idle. They should push pressure on the jobless youths to grab any jobs, even hard ones, and contribute to the world. In this way, they should persuade more people to work harder.
Regretfully, what we're seeing is the opposite. Leaders do not risk their political life by scolding the jobless youths but instead try to placate and sympathize with them for the sake of popularity. As many parents spoil their children with too much generosity, leaders are just trying to curry favor with the general public only to gain votes, which dents into the nation's growth potential.
They even take action with welfare policy. They give away money to the unemployed and the poor people. To support the aid, the government collects taxes and heavily borrows money. The national debt could increase like a snowball, which should lead to a sovereign debt crisis as seen in some European countries like Portugal, Italy, Ireland, Greece and Spain. Default is a natural consequence if you don't produce anything and only spend others' money.
Welfare policy has a good intention to give a hope to those who are so poor as to skip meals. The objective is desirable and such a policy is necessary. The problem is that it may be abused over time by giving away money for those playing without a job, churning out a number of free-riders. As immature youths choose to rely on their parents and stay idle, a generous welfare policy motivates many people capable of working to stay out of the job market. Such a phenomenon is growing in our society. The number of government subsidy recipients has increased sharply to exceed 1.6 million. It may be sooner or later when those beneficiaries hit 3 or 4 million. The situation will get worse as the number of defectors from North Korea is expected to surge due to the growing social unrest in Pyongyang.
To prevent such a situation, the state welfare system should support only those really incapable of working, including seniors without family, orphans and seriously handicapped people. When supporting all of those who cannot earn money at the moment, the welfare system will create a group of people who refuse to get any kind of work.
From this perspective, President Lee Myung-bak's "for-the-poor and practical policy" is a source of concern. It's still too early to conclude how the political slogan will evolve but it will likely focus on welfare policy measures. The government appears poised to expand the target of beneficiaries beyond the lowest income earners into middle class. The wider the welfare policy, the more people will rely on state support. It will delay our entry into the league of advanced economies.
We're now facing an unprecedented great opportunity. The U.S. has lost competitiveness in the global market and Japan is also staggering. The European Union is badly hit by fiscal problems in Portugal, Italy, Ireland, Greece and Spain. We can jump over the threshold if we push harder. Korea is facing an incredible chance to become the world's best country. But the luck falls on only those who are fully ready. Are we really ready to take on the opportunity?
What we need is challenge and adventure. We have to brace for any kind of failures and look for new markets. If a product makes a hit, the capital and human resources should be allowed to move to the strategic business segment. People in the world will come to us for whatever they need. Then, Korea can show dignity to any global powers. Regretfully, our surroundings are entirely different. We're full of fights. Most Koreans are fighting over how to divide the already-made pie, rather than struggling to produce something new. Too many people sit idle and want to live on others' money
"I've never seen an enterpriser who has succeeded by relying on subsidy. Those who put everything into their business at the risk of their lives can make success," President Lee Myung-bak told business executives at a seminar. I totally agreed. As such, the government should be small enough for each citizen not to expect any state support. But President Lee's policies have put their first step in direction toward a big government. The government spending is increasing like a snow ball. Fiscal deficit is growing fast as a result. As long as it keeps the "for-the-poor" policy slogan, the government spending and fiscal deficit will rise further and more people and businesses will rely on state support.
The policymakers should look back at their campaign pledges: the "747" policy goal and "business-friendly" environment. This is the only way to boost South Korea to the level of advanced economies. The causality has not changed ever.
They have to go back to their original determination to make a "business-friendly" country even now. If so, we will be able to make another miracle to become the world's best nation sooner or later.
By Kim Chung-ho / President of the Center for Free Enterprise
