Mourners placed flowers at a memorial for K-pop star Goo Hara at the Seoul St. Mary’s Hospital on … [+]
Chung Sung-Jun/Getty Images
If you think 2019 has been hell, spare a thought for Moon Jae-in. South Korea’s president, after all, is grappling with some of the developed world’s most unhappy millennials.
The recent rash of suicides among K-pop stars is making for unsettling headlines around the globe—and some serious, well, soul-searching in political circles. Young Koreans routinely rank among the least happy in Organization for Economic Cooperation and Development circles. One oft-cited explanation: pressure from all angles to succeed in a hyper-competitive society.
It’s no surprise that the K-pop industry has become the face of Korea’s global cultural soft power—and an economic microcosm. The recent death of girl-group singer Goo Hara, 28, followed the October suicide of songstress Sulli, 25. This month’s death of actor Cha In-ha, 27, only intensified debates on extreme social pressures facing artists, but also young Koreans more broadly.
It adds fuel to arguments about the fallout from economic angst as Korea loses its grove in a hyper-competitive neighborhood. As many young Koreans buzz about the “hell Joseon,” or living hell, they believe characterizes their present, Seoul often seems too focused on the past to carve out a brighter, happier future.
Moon’s huge investment in achieving peace with North Korea, for example, is more backward-looking than progressive. It’s taken his focus off efforts to remake an uncompetitive economy. Sure, Korea’s all-important export engine got trumped by the global trade war. But other than some low-hanging fruit moves to hike minimum wages, Moon achieved very little of his pledge to hasten growth and spread its benefits.
Seoul also faces diminishing returns on efforts to work with Donald Trump’s chaotic White House. Now, with Moon at the halfway point of his tenure, Trump is shaking him down for protection money, like some mafia boss. The president is upping the price for hosting U.S. troops on the peninsula by 400%.
The good news is that there is still time for Moon to turn things around in the second half of his five-year presidency. And to give young Koreans hope for a better tomorrow. The window for change, though, isn’t as wide as he hopes. If Moon is going to engineer a turnaround, he must hit the new year running.
Here are four ways Moon can regain reformist momentum.
One: deliver on “trickle-up growth” pledges. Moon was elected in May 2017 with a mandate to make Asia’s fourth-biggest economy work for all Koreans. His team has put few wins on the scoreboard these last 944 days to boost wages broadly or increase competitiveness.
Unfortunately, Moon relied largely on old-school stimulus packages and central bank easing. Seoul, in fact, is rolling out the biggest fiscal jolt since the 2008 global financial crisis. The Bank of Korea’s benchmark rate is a highly accommodative 1.25%.
Yet the jolt Korea needs is a deregulatory one. While Moon’s government gets credit for boosting subsidies and tax incentives for small businesses, the structure of the economy still advantages giant exporters at the top of the food chain.
South Korean President Moon Jae-in listens to a report from military officials at a National … [+]
South Korean Presidential Blue House via Getty Images
Two: take on the “chaebols” once and for all. The legacy costs of a handful of family-owned conglomerates, or chaebols, with vast political connections dominating all walks of economic life are growing as 2020 approaches.
Before Moon, President Park Geun-hye promised to “democratize” growth by aiming the tax regime at small-and-midsize enterprises. To no avail, though. By the time of her 2017 impeachment for alleged bribery and influence peddling, chaebols were as dominant as ever.
This creates a hyper-stressful socioeconomic system whereby many young people feel they must get a job at a Samsung, Hyundai, LG and Daewoo or be relegated to the sidelines career-wise. The key is offering young Koreans new alternatives.
The quickest way to share the spoils of gross domestic product with more Koreans is to generate more energy from the ground up. So would recalibrating growth engines away from exports toward services. And leveling the playing field to produce tech “unicorns” and more game-changing startups.
Three: demand more of Korea Inc. One reason Moon and his predecessors are loath to wrest power away from chaebols is fear of destabilizing a model that places them at its core. Removing tentacles wrapped firmly around virtually every Korean industry must be done skillfully and methodically.
In the meantime, though, Moon’s government should cajole Korea’s biggest companies to share the wealth with households. It could penalize companies hoarding hundreds of billions of dollars of cash that could fatten paychecks, invest in new startups or plowing into promising new industries. Or, Seoul could go the other way–rewarding executives redistributing profits.
Declining rates of investment are their own message. The heavy emphasis on government stimulus over structural reform is negatively affecting corporate confidence, adding to the headwinds bearing down in the economy. Fresh government action may enliven Korea’s animal spirits—and the job markets for young Koreans.
Four: empower Korea’s female masses. Every available study—be they from the World Bank to Goldman Sachs—finds that countries and companies that best utilize female workforces are more productive, innovative and prosperous.
Yet Korea is losing ground. Currently, the World Economic Forum ranks Korea 115th out of 144 countries in gender equality versus 108th in 2008. In 2018, Korea was No. 30 out of 36 OECD members in women’s employment. It’s a paradox, considering Korea tops tertiary education rankings for women aged 25 to 34. The achievement, though, is no match for the patriarchy.
Moon should prod Korea Inc. to promote more women into management positions and consider formal quotas. He should redouble efforts to increase female participation in politics. The Inter-Parliamentary Union Seoul ranks No. 120 based on the percentage of women in parliament, trailing Mongolia, Turkey and Indonesia. Nor is it surprising in this global #MeToo moment that K-pop has faced its own allegations of misogyny.
There are myriad other things Moon could do to avoid lame-duck status between now and 2022. An obvious one is finding more reliable economic partners than Trump’s America, preferably closer to home. While mending fences with China and Japan, Moon might consider signing on to the 11-nation Trans-Pacific Partnership trade group.
Moon might also consider supersizing the “special enterprise zone” model in which earlier governments dabbled. With reduced red tape and lower taxes for scrappy startups aiming to disrupt Korea Inc., Moon could raise the entire nation’s game. And in the process raise the spirits of Korea’s hell-obsessed youth.