This document was written by the former deputy prime minister and the minister of the Economic Planning Board, Cho Sun, who participated as a keynote speaker and presenter in the 23rd Academic and Policy Seminar held on June 17, 1989, hosted by the Korea International Economic Society.
The former deputy prime minister, Mr. Cho, has approached the issue of economic imbalance in Korea from three standpoints: distribution, production system, and regional development. He posited that the status of the Korean economy has advanced to join the upper ranks of developing countries over the 40 years, after the inauguration of the current government. He attributed it to the effort taken by Korea as a whole, under the basis of economics-as-ideology. However, he also noted the negative effects caused from the rapid development. The problems include public demands to rectify imbalance, the increase of unfairness and inequality, the increase of relative deprivation due to the imbalanced distribution of wealth, an inclination towards large corporations due to production system imbalances, and problems caused from centralization to metropolitan areas since the late 1980s.
Mr. Cho remarked that the income distribution status in Korea is lower than that of the United States, Japan, and Taiwan, similar to Italy, and higher than Mexico. Although it was similar in the early stages of the Economic Development Plan, support policy concentrated on large companies and the high inflation caused by the process of rapid growth. The overtime labor of workers, an increase of industrial disasters, and alienation has caused the increase of relative poverty. Therefore, he proposed that the government to focus on redistributing wealth in the financial banking area. To do this, mechanisms such as the strengthening of the properties ownership tax – introducing public possession of land, and the execution of an integrated land tax system – and introducing an integrated taxation of banking property income, and establishing a real-name financial transaction system.
From the perspective of financial expenditure, he addressed the need for plans to prioritize the basic demands of low-income groups, such as health, education and housing, and plans to support the independence of low-income and underprivileged groups through public systems. Furthermore, he also indicated the need to expand social security systems to cope with possible loss of income from disease, old age, and industrial disasters.
The government has invested funds to achieve export goals in the past, and the alienation of small- and medium-sized enterprises was aggravated as large enterprises were the primary beneficiaries. However to alleviate imbalance in production systems, other plans to expand credit guarantee funds should be implemented.
Mr. Cho suggested that the economic paradigm should be shifted from a physical to a human-oriented perspective in order to solve economic imbalance. He emphasized that balance and fairness is essential in moving towards an advanced economy.
한국경제의 불균형구조와 정책대응(Unbalanced economic structure in Korea and its policy plans)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic Administration|