Weathering challenges with authoritarianism

his implementation of
policy is so solemn that it appears authoritative.

Jaung HoonThe author is a professor of political science at Chung-Ang University and a columnist for the JoongAng Ilbo. It is our longstanding habit to worry about something that hasn’t happened. Next year’s general election is still nine months away, but people are already paying attention to the evaluation President Yoon Suk Yeol and his party will receive. Several experts were interviewed about their opinions about the 15-month old Yoon administration. They responded that they roughly see where the government policies are headed, and they agree with many things. But they say there is no clear picture on the direction of governance.

I believe the identity of the administration can be summarized as a “neo-developmental government” in the deglobalization era. In other words, as the world is being split into two separate worlds after the one with openness and integration, the Yoon government quickly reflected this trend as it handled state affairs.

The separated world and the trend of deglobalization are both opportunities and challenges for us. The government has positioned Korea as a manufacturing powerhouse of the fourth industrial revolution in the deglobalizing world. And it has assumed a leading role in determining such national responses. The Yoon administration can be called a “neo-developmental government” since it is directing and orchestrating another great leap forward in the deglobalization era after Korea’s status as a developing country in the 1970s and 80s.

Unless you are natural-born opponents against market economy, you would generally agree with this statement. The problem is the way the conservative government is pursuing the new development strategy. We can hardly give a high score to the attitude of this neo-developmental government toward its key partners such as the private sector.

We have often seen President Yoon behave casually in his meetings with leaders of conglomerates and small companies. But his implemention of policies is so solemn that it appears authoritative. An example is the recent incident in which the deputy prime minister for economic affairs had openly pressured instant noodle manufacturers to lower prices their products. In other words, despite the dramatic changes in the business environments as seen in the fields of semiconductors, electronic vehicles and bio medicine, the way the government encouraged their development was no different from the days of the “Miracle on the Han River.”

Let’s take a look at some of key numbers — 19.6 percent, 15 percent and 5 percent — which represent Yoon’s “neo-developmental government” in the deglobalization era.

As of April, Korea’s exports to China accounted for 19.6 percent, a reversal in exports to the U.S. and China for the first time in 20 years. After the dramatic turnaround in trade, the Korean economy is once again taking a sharp turn to the U.S.

As we went through 2022 — and 2023, the aspects of the inflection point became clear. The world is rapidly being split into a free world and an authoritarian world. Not only semiconductors, but also energy supply chains are being rebuilt fast. The driving force behind the separation and reorganization is governments. The Chips and Science Act, the Inflation Reduction Act, and the Infrastructure Investment and Jobs Act — all strongly backed by U.S. President Joe Biden — show a changed reality in which the government is returning to the frontline with aggressive industrial development policies after decades.

The second number that represents Yoon’s neo-developmental government is 15 percent. In the K-semiconductor Act, passed in March despite the opposition parties’ resistance, the government offered up to 15-percent tax exemption to the conglomerates and mid-size companies’ investments in semiconductor manufacturing infrastructures. The long debate on whether the deduction should be 8 percent or 15 percent ended with 15 percent, showing what the Yoon government’s goal is.

There is one regret. The leadership role of the neo-development government is not limited to selecting and supporting strategic industries. In the war against inflation — a tough challenge in the era of deglobalization — the conservative government sometimes adopted bureaucratic guidance reminiscent of the era of a developing country.

The deputy prime minister for economy publicly put pressure on instant noodle makers, saying that the price of flour has been cut, but the price of noodles continues to rise. Manufacturers eventually cut the prices by 5 percent. Of course, the price war is a battleground directly related to the livelihood of the people. But was there any other way than the old-fashioned directive?

Here is a conclusion. In the era of deglobalization and economic security, the neo-development strategy of the Yoon administration is agreeable. The key is how the government will work on it. Will its role be focused on supporting, cooperating and communicating with companies? Or will it be on controlling and guiding companies?

Translation by the Korea JoongAng Daily staff.