By Kim Jae-kyoung
SINGAPORE ― President Moon Jae-in needs to become more flexible in policy implementation to ensure success for his "inclusive growth strategy," according to Hoe Ee Khor, chief economist at the ASEAN+3 Macroeconomic Research Office (AMRO).
"The current administration's continuing efforts and strong commitment to pursue inclusive growth strategies are commendable," Khor said in a recent interview.
"However, implementation should be flexible to minimize adverse effects on labor and on small- and medium-sized enterprises (SMEs)."
Established in 2011 in Singapore by 10 ASEAN member states and Korea, Japan and China, AMRO is Asia's regional macroeconomic surveillance unit.
But Khor, who was previously deputy director of the IMF's Asia-Pacific department,?praised the Moon administration's effort to enhance the implementation of policies related to innovative growth strategies and fair competition pillars.
"It would lift up Korea's long-term growth potential," he said.
From his perspective, innovative growth strategies would help in expanding Korea's technological frontier, since it encompasses strong support for advanced technologies and the development of 5G and internet of things network infrastructure.
Fair competition, he believes, would strengthen the competitiveness and productivity of SMEs which would become future growth engines.
The veteran economist identified three key risks that could pose threats to the Korean economy _ conflict of global trade, heavy reliance on technology and the aging population.
According to his observations, uncertainty about global trade tension continues to be a key challenge to Korea's export performance.
Second, the uneven growth between information and communication technology (ICT) and non-ICT companies and the excessive reliance on the ICT industry remain structural issues in production.
Third, demographic challenges from the aging population and the rigid labor market would weigh down medium- to long-term growth.
He called on Moon and his administration to place top priority on reforming economic structures in promoting the economy to become more resilient and ensure sustainable growth.
"Korea is a highly open economy that is dependent on manufacturing so the economy is inevitably sensitive to cyclical and structural changes in global value chains," he said.
"In order to sustain growth and to insulate the Korean economy against potential adverse spillovers from external shocks, the administration should push forward comprehensive structural reforms."
He pointed out the two most urgent issues to be addressed are "enhancing competitiveness of non-ICT sectors including SMEs and the service industry" and "increasing flexibility of the labor market and labor force participation among women and the younger generations."
The Singapore-based economist forecasts the Korean economy to grow by 2.9 percent in 2018 and 2.8 percent in 2019.
"Strong exports, especially technology products, and continuing growth in private consumption with support from fiscal spending, would be key drivers to overall growth in 2018," he said.
"If construction investment becomes stronger than currently expected, economic growth may be higher."
SINGAPORE ― President Moon Jae-in needs to become more flexible in policy implementation to ensure success for his "inclusive growth strategy," according to Hoe Ee Khor, chief economist at the ASEAN+3 Macroeconomic Research Office (AMRO).
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| Hoe Ee Khor |
"However, implementation should be flexible to minimize adverse effects on labor and on small- and medium-sized enterprises (SMEs)."
Established in 2011 in Singapore by 10 ASEAN member states and Korea, Japan and China, AMRO is Asia's regional macroeconomic surveillance unit.
But Khor, who was previously deputy director of the IMF's Asia-Pacific department,?praised the Moon administration's effort to enhance the implementation of policies related to innovative growth strategies and fair competition pillars.
"It would lift up Korea's long-term growth potential," he said.
From his perspective, innovative growth strategies would help in expanding Korea's technological frontier, since it encompasses strong support for advanced technologies and the development of 5G and internet of things network infrastructure.
Fair competition, he believes, would strengthen the competitiveness and productivity of SMEs which would become future growth engines.
The veteran economist identified three key risks that could pose threats to the Korean economy _ conflict of global trade, heavy reliance on technology and the aging population.
According to his observations, uncertainty about global trade tension continues to be a key challenge to Korea's export performance.
Second, the uneven growth between information and communication technology (ICT) and non-ICT companies and the excessive reliance on the ICT industry remain structural issues in production.
Third, demographic challenges from the aging population and the rigid labor market would weigh down medium- to long-term growth.
He called on Moon and his administration to place top priority on reforming economic structures in promoting the economy to become more resilient and ensure sustainable growth.
"Korea is a highly open economy that is dependent on manufacturing so the economy is inevitably sensitive to cyclical and structural changes in global value chains," he said.
"In order to sustain growth and to insulate the Korean economy against potential adverse spillovers from external shocks, the administration should push forward comprehensive structural reforms."
He pointed out the two most urgent issues to be addressed are "enhancing competitiveness of non-ICT sectors including SMEs and the service industry" and "increasing flexibility of the labor market and labor force participation among women and the younger generations."
The Singapore-based economist forecasts the Korean economy to grow by 2.9 percent in 2018 and 2.8 percent in 2019.
"Strong exports, especially technology products, and continuing growth in private consumption with support from fiscal spending, would be key drivers to overall growth in 2018," he said.
"If construction investment becomes stronger than currently expected, economic growth may be higher."
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