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Depoliticizing the economy

Posted October. 05, 2016 07:35,   

Updated October. 05, 2016 07:56

한국어

The Korea Development Institute, the first Korean think tank in social science, was established in 1971. The KDI supported government economic plans and policymaking since Korea’s third five-year development plan that started in 1972. It played an important role in helping Korea overcome the first oil shock and achieve an annual growth rate of 9.7 percent based on the development plan’s focus on heavy industries. Today, cities and provinces and even strong presidential candidates set up a think tank.

Think tanks that are run by or represent the government tend to give a more optimistic forecast on economic growth rates. The media have long reported their figures along with those released by private sector think tanks for comparison. They often give a rosy picture when the government attracts an international event or a sporting event. Their reports say that such event is expected to generate profits from hundreds of millions of dollars to billions of dollars, mentioning terms such as the “economic ripple effect” or a “production-inducing effect.”

The Korean Institute for International Economic Policy, another government think tank, forecast that the 2013 World Rowing Championship in Chungju would reap an economic effect worth 115.9 billion won (104.4 million dollars). However, after the event, the National Assembly Budget Office said it caused a net loss of 85.2 billion won (76.7 million dollars) to the country. There is no way of knowing whether a think tank researcher was conscious of the client’s influence, whether the analysis framework was wrong, or whether the figures in the base case scenario was far from realistic. Furthermore, no one raises a question about why the forecast was so off.

FROM100, a company consisting of 100 experts in social science, science and engineering and medicine, was established by Jeong Gab-yeong, a former Yonsei University dean. It is a gathering of senior scholars who intend to propose policies (movements- M) by analyzing potential risks (R) and opportunity (O) in the future (F). The first out of its 10 proposals is “depoliticizing the economy.” It means that economic issues should be tackled with the economic logic without the intervention of a political ideology. Even if there is a good proposal, if politicians exploit it, it can hardly be realized. Hopefully, FROM100 can come up with an idea that makes the economy independent of politics.