Strategic overhaul needed

Korea should prepare for global economic recession

As the global economy braces for another Great Recession as a result of the new coronavirus, the government has decided to activate an Emergency Economic Council to be chaired by President Moon Jae-in. Watching the chief executive take care of the economy in an emergency will likely provide psychological relief to the public. Economic players also might hope that bureaucrats will carry out bold measures more swiftly.

"This is no time to argue about this or that," Moon said at a recent meeting. "We should mobilize all resources and tools to put any viable policies into action." The emergency council will likely target providing help to get over damage, bailing out marginal enterprises, and securing and disbursing fiscal resources to stimulate domestic demand. Moon's economic team may also discuss the controversial idea of a "basic disaster income."

The President's remarks reflect both an urgency and a recognition of the problems, but give the impression of focusing on short-term measures. Economists at home and abroad are concerned that COVID-19 might drive the global economy into a recession. Since early this month, the economy has been cooling as rapidly as the spread of the coronavirus. Even optimistic U.S. President Donald Trump changed his stance, predicting the current turmoil would last until July or August. Even though the world can conquer the pandemic, there is no guarantee that its economic aftereffects will also be dealt with.

If the government's emergency council is for providing symptomatic treatment to "put out only the biggest fire," there are not many reasons for the President to take the lead in the fight against the virus-triggered crisis. Spending money does not require particular knowhow. The government should not only cope with short-term damage but also set up a mid- to long-term economic strategy to survive economic woes and revive growth momentum. That strategy ought to aim to improve the competitiveness of Korea Inc. by, for instance, revising Moon's key economic policies. Successful governments have always turned a crisis into an opportunity for national renovation. This is such a moment.