[Editorial] 3 Years of Roh Vs. 3 Months of Merkel

Three months since German Chancellor Angela Merkel came to office, German companies have showed conspicuous signs of life. A survey of over 7,000 German companies put Germany’s business survey index for February at 103.3, its highest figure in 14 years.

When a country’s business survey index is above 100, it means that optimism is more prevalent than pessimism. In other words, Germany’s companies are responding to the pro-corporation policies of Chancellor Merkel.

The German economy is regaining its vibrancy as a result. Plant and equipment investment planned by the electronics industry this year has increased by five percent, raising forecasts that investment in the manufacturing industry will be more active. German annual economic growth estimates have been raised to two percent, the highest rate since 2000.

The Merkel administration has been particularly active in loosening regulations on corporations, making the labor market more flexible and privatizing the public sector. These policies are providing air to Germany’s companies, which were suffocating under restrictive equality, distribution, regulation, and labor protection regulations.

Korea’s February business survey index from a Bank of Korea poll of 2,900 Korean companies was 92. In the 36 months that President Roh has been in his office, the index has never risen above 100.

The Roh administration’s anti-market policies, and the anti-corporation sentiment shown by Korean politicians and civic groups are some of the reasons why Korean corporations are losing their motivation. With repetitious political and social whims putting companies at the government’s mercy, investment has naturally been affected. The government has intimidated companies and then claimed “there was no such thing,” and companies are sick and tired of it. Three years have passed since Roh took office, with only low growth, high unemployment, the collapse of the middle class, and the proliferation of poverty to show for it.

With recent rise of the won and the shortage of raw materials, the export industry’s profitability is declining, along with hopes of economic recovery. If corporations that are losing their competitive export edge decide to relocate their plants abroad, creating more jobs, and stimulating consumer spending will become even more difficult.

One of the reasons why so many people are turning their backs on the Roh administration is the fact that the actual economy feels so different from the one the government is publicizing. But the Roh government is still approaching its third anniversary by concentrating on the upcoming elections rather than on the economy.