(EDITORIAL from the Korea Herald on Dec. 8)

No action, talk only

"Preemptive responses and bold action" is the mantra of President Lee Myung-bak's
administration, which is fighting an uphill battle against the devastating impact
of the global financial crisis on the Korean economy.
Lee has promised over and over again to respond preemptively and take bold action
when new signs of crisis are found.
Among the prospective beneficiaries of speedy action are businesses experiencing
a temporary credit crunch. The Lee administration has vowed to rescue all
profitable companies that are temporarily distressed. But few have gotten access
to rescue loans, as his promise has not yet translated into action.
Who should be held accountable if such a company, though capable of pulling
through the crisis with a little support from the government, should go belly up?
The Lee administration has also promised a drastic increase in trade financing.
But little progress has been made since October, when the administration unveiled
its plan to invest an additional 1.65 trillion won in Korea Development Bank,
Industrial Bank of Korea and Export-Import Bank.
There is no shortage of plausible explanations. But didn't Lee say he will "take
unprecedented measures in addressing the unprecedented crisis?" His
administration will have no one else to blame if it is accused of "no action,
talk only."
The administration's "NATO" is evidenced by a recent report that only a small
fraction of the funds it has committed is now being put to use. As a result, the
nation cannot put the brakes on its economy as it slides deeper into crisis.
According to the report, the administration has so far promised to spend 33.3
trillion, or 3.7 percent of gross domestic product, on stimulating aggregate
demand. But at the moment, only 5.4 trillion won is being ladled out for cash
rebates, subsidies and other purposes, while the use of the remainder is awaiting
approval from the National Assembly.
The spending plans are held hostage by partisan conflict, and there is no knowing
when they will be approved.
The delay in action in Korea is in sharp contrast with the swift passage of a
$700 billion bailout bill through the U.S. Congress and a 12 trillion yen
stimulus package through the Japanese Diet in September.
The Lee administration insists that the National Assembly, more specifically the
main opposition Democratic Party, be held accountable for the delay. But much of
the blame must be shouldered by the Lee administration and the ruling Grand
National Party, which has the National Assembly under its control.
The administration made a serious mistake when it integrated a stimulus package
into the 2009 budget request, instead of writing a separate supplementary budget
bill. As a result, the launch of welfare projects, tax cuts and big-ticket public
works must be delayed until next year.
The National Assembly is constitutionally required to pass a budget request 30
days before a new fiscal year starts on Jan. 1. The Dec. 2 deadline came and
went. But the budget committee has yet to complete deliberations on the budget
request.
The passage of the budget bill is long overdue. But it is encouraging to see the
rival parties moving toward a compromise. No less heartening is that they agreed
last Friday to make a compromise on the administration-initiated proposal to cut
the real estate-holding tax and the income tax. There must be no backpedaling on
the agreement. They have no time to waste.
Bipartisanship should prevail in the future as well. The main opposition party
will do well to take no time in endorsing administration-initiated bills designed
to help corporations and individuals tide over the economic hardships unless they
are deemed seriously flawed. It needs to share a sense of urgency with the
administration if it regards itself as a responsible political force.
(END)