Korea's economy needs to stay alert

The Korean economy is facing negative external factors. Due to the political unrest in Italy, European stock markets are dropping and bond prices are dropping one after another. Investors are selling European stocks and bonds in anticipation of an evaluative crisis. Asian financial markets have also begun to stammer as Europe has been shaken following emerging economies such as Argentina, Turkey and Indonesia. Chinese and Japanese stock markets plunged today and Korea's benchmark KOSPI fell nearly 2 percent. Many experts have already warned that the global financial crisis, which swept the world 10 years ago, will happen again.

To make matters worse, the barriers to foreign trade are increasing. Above all, it is worrisome that the trade war between the U.S. and China has reenacted in just 10 days. The United States said it will carry out its original decision to impose a 25 percent higher tariff on high-tech products from China as planned. China immediately criticized the United States for its actions. The Commerce Department of the country said in a spokesman's commentary, " The United States has violated the agreement between the two sides a while ago, " saying China has the confidence to protect the interests of the people and its core interests. This is a strong response from the government.

Such external instability is a cause for concern for the small open economy. If the foreign financial market shakes, Korea's stock, bond and foreign exchange markets will suffer, and if global trade is strong, Korea's exports will suffer. In particular, Korea's exports are heavily concentrated, with 50 percent contributing to economic growth.

Besides the foreign economy, the Korean economy itself is very unstable. Korea's economic indicators for the Organization for Economic Cooperation and Development (OECD) fell for the ninth consecutive month, signaling a downward trend. The number of employed people rose by 120,000 in April from the same month last year, the worst in 10 years. A survey by the National Statistical Office showed that the distribution of income is getting worse, not better.

In this situation, Korea has failed to gather wisdom. The labor community declared a strong foreign struggle after the revision of the minimum wage law passed the plenary session. It has been a long time since the National Assembly failed to function properly because it was fighting with each other. The extra budget, which costs nearly 4 trillion won, was reviewed in three days, and the formation of a parliamentary committee in the second half, which should have been completed, is still neglected.

You have to stay alert. In general, a nation's crisis is not caused by external factors alone. It is common for external anxiety to explode as it combines with South Korean vulnerabilities. Without thorough preparation and management, the team could suffer beyond expectations. Other issues here are not receiving attention and are not properly discussed due to the North Korean nuclear issue. We should never neglect our domestic economy and other issues.

 [Yonhap News]