Experts Say "Korean Economy Facing Low Growth Crisis Needs French-Style Reform"

FKCCI Holds Forum on 'Revival of French Economy through Reform and Implications for Korean Economy'

[Asia Economy Reporter Ki-min Lee] To revive South Korea's economy, which is facing a low-growth crisis due to continuous sluggishness in exports and domestic demand, there is a claim that a French-style reform, which is currently raising economic growth rates through intensive labor reforms and regulatory innovations, is necessary.

At an expert roundtable titled "The Revival of the French Economy through Reform and Its Implications for the Korean Economy," hosted by the Federation of Korean Industries on the 18th, it was pointed out that we need to find a desirable direction for our economy through the secret of France's economic reform.

Kwon Tae-shin, Vice Chairman of the Federation of Korean Industries, said in his opening remarks, "The more difficult the external situation, the more we should reflect on our current position," and added, "The reforms currently underway in France are urgently needed in Korea as well," explaining the purpose of the roundtable. Korea has recorded consecutive negative exports for the past 14 months until January this year. Furthermore, with this year's economic growth rate predicted to be in the 2% range, it is analyzed that achieving the forecast is not easy due to adverse factors such as the novel coronavirus disease (COVID-19). In contrast, France, under President Macron's administration since May 2017, has shown steady economic growth without negative growth since the third quarter of the same year. The unemployment rate has also continuously declined from 9.6% in March 2017 to 8.4% in the second quarter of last year.

The experts attending the roundtable cited the success factors of France's economic reform as ▲ accurate diagnosis of problems and strong reform prescriptions from a national perspective and resolute reform implementation ▲ formation of consensus through active communication with the public ▲ creation of a business-friendly environment through labor reforms.

Professor Hong Sung-min of Dong-A University’s Department of Political Science and Diplomacy, who presented the achievements of President Macron's economic reforms in France, introduced that labor reforms aimed at weakening union power, corporate tax cuts, abolition of the 35-hour workweek, and pension reforms have recently lowered France's unemployment rate and increased economic growth. Professor Hong said, "After his election, President Macron expressed his reform will with strong messages such as 'Those who do not work shall not eat' and 'The government will actively support those willing to work,'" and explained, "He pushed forward bold reforms such as labor reform, railway reform, and abolition of the wealth tax." He also argued, "Although there were public oppositions such as strikes and protests during the process, ultimately the public came to agree on the necessity of change."

Professor Kim Do-hoon, invited professor at Sogang University Graduate School of International Studies (former president of the Korea Institute for Industrial Economics and Trade), also explained the factors behind President Macron's economic success in his remarks. Professor Kim emphasized as the first factor that despite Macron's progressive background, he challenged the existing Socialist Party policy line and implemented business-friendly policies necessary for France to enhance national competitiveness. Regarding Macron's economic reform process, Professor Kim evaluated it as "comparable to the 'Third Way' pursued by Tony Blair, former UK Labour Party Prime Minister." He further pointed out that Macron maintained an attitude of actively communicating with the public and stakeholders and seeking practical compromises and concessions during policy implementation, which led to successful reforms. Professor Kim also assessed that "Macron's rich experience in administration and the real economy, including his past roles in finance-related departments and as an executive at Rothschild Bank, enabled him to accurately diagnose France's problems and propose innovative reform plans."

Vice Chairman Kwon emphasized the importance of the right direction in economic policy during the panel discussion. He said, "The Korean and French governments, launched around the same time, implemented opposite policies," and added, "The fact that the results are also moving in opposite directions shows that economic conditions are greatly influenced by policy direction," highlighting the importance of the correct direction in economic policy.

This content was produced with the assistance of AI translation services.