President Lee Jae-myung declared on Wednesday, at a press conference marking the first anniversary of his inauguration, "I will make this year the year the bold dream of an 'irreplaceable Republic of Korea' that no other nation can substitute for begins." As his foremost policy goal toward this end, he put forward becoming an industrial superpower with an insurmountable lead. He also presented goals including a diplomatic and security powerhouse, a normal society built on rules and principles, and a government that saves the lives of its people. Regarding the use of surplus tax revenue from semiconductors, Lee said, "I will invest in nurturing growth potential for future generations." Entering the second year of his term, this is interpreted as placing greater emphasis on finding future growth engines.
Lee's vision of opening a new era of the "K-Initiative" by nurturing "global growth engines with an insurmountable lead" in industrial sectors beyond semiconductors is worthy of praise. His policy direction of allowing all citizens to share equally in the fruits of growth through a "fundamental shift in growth strategy" is also correct. Given that the Organisation for Economic Co-operation and Development (OECD) recently projected that Korea's potential growth rate would fall to the 1.4% range in the fourth quarter of next year, growth must now be made a central agenda. Moreover, although this year's growth forecast is being revised upward on the back of a semiconductor super-boom, the economy's fundamental strength is weakening due to low birth rates and an aging population, and the warmth of the growth recovery is concentrated in some large corporations, failing to reach the working-class economy.
For Korea to stand tall as an industrial superpower with an insurmountable lead, it must first rebound its potential growth rate. To this end, it is urgent to begin the six structural reforms Lee proclaimed, covering regulation, finance, public sector, pensions, education, and labor. Finding future new industries cannot be achieved through capital injection alone, such as the "National Growth Fund." With the capital- and labor-input growth model having reached its limits, bone-cutting structural reform is required to raise productivity. But it is also a fact that the administration drew criticism for being passive in implementation, mindful of stakeholder backlash and voter sentiment in the June 3 local elections.
Lee said that day that the government "will be reborn as an 'innovative pragmatic government' most proactive toward change." To reshape the economy's fundamentals in line with the artificial intelligence (AI) transition and other changes, inefficient elements must be boldly removed. The government must complete structural reform with the resolve to achieve the goal of an industrial superpower with an insurmountable lead within the four years remaining in Lee's term. To innovate the industrial ecosystem, making the rigid labor market more flexible is the most urgent task. What is needed now is not a feast of words but the resolve to reform.
