Jae-Wan Park "Korea Ruined by Get-Rich-Quick Mentality... Let's Solve It with Economic Education" [Must! Financial Education]⑦

Park Jaewan, President of the Economic Education Association
Former Minister of Strategy and Finance on the Direction of Economic Education
"Lack of Economic Insight... The Reason for Difficulty in Prosperity and National Security"

“A choice that seems profitable right now can ultimately erode the national economy in the mid to long term. Economic and financial education should focus on forming this kind of economic insight.”

On the 9th, Park Jae-wan, chairman of the Economic Education Organizations Council, met with Asia Economy at the Economic Education Organizations Council in Seongdong-gu, Seoul, and said, “Our country’s economic insight is insufficient compared to its economic level, which becomes an obstacle to advancing toward 富民安國 (wealthy people and a stable nation).” The Economic Education Organizations Council is a group consisting of about 50 organizations, including economic organizations, financial companies, corporations, and civic groups, aiming to revitalize economic education. Chairman Park has been serving as the second chairman since February last year.

Park Jae-wan, chairman of the Economic Education Organization Council, is being interviewed by Asia Economy at his office in Seongdong-gu, Seoul. Photo by Jo Yong-jun jun21@

Chairman Park evaluated the economic literacy of our people as “gradually improving but still below 60 points out of 100.” The Ministry of Economy and Finance conducted a survey on economic literacy among 3,000 citizens from September 28 to November 7 last year. Respondents ranged from 18-year-old youths to 79-year-old seniors, with an average score of 58.7. Although it rose by 2.4 points compared to the previous survey (2021), it remains a low score below 60 points.

The economic literacy of vulnerable groups was even lower. By age group, people in their 20s and 30s scored relatively high at 61.9 and 63.8 points, respectively, but the elderly in their 60s (53.6 points) and 70s (46.8 points) scored poorly. Chairman Park emphasized, “Raising the average score is important, but it is more crucial to improve the scores of the elderly in their 40s and low-income groups,” adding, “It is important to enhance the economic literacy of various groups such as credit delinquents, multicultural families, people with severe disabilities, and North Korean defectors.”

Furthermore, Chairman Park pointed out, “There is a widespread mentality of hoping for windfalls and unearned income rather than effort, and there is a considerable bubble caused by conspicuous consumption such as luxury goods and private education,” adding, “There is a lack of understanding of the market economy and fair systems, leading to reliance on connections such as school or regional ties, or a tendency to depend on parental support even in old age.”

Economics vs. Finance... “Economic values should be formed first”

Which should take priority between theory-based economic education and practical, everyday financial education? After a brief consideration, Chairman Park chose the former. He stated, “Economic and financial education is not just about learning how to grow money well,” and added, “Before technical financial education such as asset formation and financial planning, it is better to establish economic values or philosophy first through economic education, starting from how the economy works to rational decision-making methods.”

Park Jae-wan, chairman of the Economic Education Association, is being interviewed by Asia Economy at his office in Seongdong-gu, Seoul. Photo by Jo Yong-jun jun21@

For example, Chairman Park analyzed that the reason pension reform discussions have stalled despite the impending depletion of the National Pension Fund is due to the immature economic values of our people. He explained, “Currently, the pension yield ratio (benefits received compared to premiums paid) is set at about 1.6 times, but if pension reform does not lower this ratio, the yield ratio for the younger generation will fall significantly in the future,” adding, “The vested interests must concede to reduce the damage to the younger generation. If pension reform is fiercely opposed to protect individual interests as it is now, the entire economy will face mutual destruction.”

In contrast, Chairman Park explained that the Swedish people, who have relatively high economic insight, succeeded in pension reform by adopting the principle of ‘fixed contributions but variable benefits.’ Sweden was the first European country to introduce the automatic adjustment mechanism for pensions called the ‘Notional Defined Contribution (NDC) income-related’ system in 1998. This system reduces annual pension payments as life expectancy increases and cuts payments until balanced finances are achieved if pension liabilities exceed assets. Chairman Park commented, “The Swedish people did not make a difficult decision because they were foolish. They reached a social consensus for sustainable pensions for their children and descendants.”

Chairman Park also noted, “The Swiss people’s opposition to basic income was a mature choice for the mid to long term rather than immediate benefits.” In 2016, Switzerland held a referendum on basic income, which would have provided about 3 million won in cash to all citizens. The Swiss people rejected it with 77% voting against, demanding long-term measures rather than temporary cash payments. Regarding this, Chairman Park explained, “The purpose of economic education is to enable responsible decisions that consider the impact of economic policies on the economy and future generations rather than individual interests.”

AI and Metaverse... “Experiential education applying new technologies is needed”

Recently, game-based economic and financial education applying new technologies such as the metaverse (extended virtual world) has been gaining attention in the financial sector. Shinhan Bank’s metaverse-based financial education game ‘Solverse,’ launched in September 2021, was recognized as a model case by the Financial Services Commission. Subsequently, in December last year, the Bankers Association released the financial education content ‘Let’s Play with Bank’ in collaboration with Lemon Tree, the developer of the allowance management app ‘Puffin’ for children and adolescents. Through quizzes on topics such as the role of banks and prevention of financial crimes, learners can easily and enjoyably study the somewhat difficult subjects of economics and finance.

[Image source=Shinhan Bank·Korea Federation of Banks]

Chairman Park said, “As the saying goes, ‘Seeing is believing,’ experiential learning is essential in economic and financial education,” adding, “In the future, digital-based practical learning conducted in virtual spaces such as the metaverse should develop.” He also mentioned, “Since digital education is not limited by time and space, economic and financial education can be actively implemented nationwide.”

He emphasized economic and financial education using artificial intelligence (AI). Chairman Park said, “To enhance the effectiveness of education, Q&A time with students is important. Using AI teachers can produce effects similar to one-on-one personal tutoring,” and explained, “With real-time feedback from AI teachers, accessibility and interest can be enhanced, strengthening interactive learning.”

While acknowledging that private-sector economic and financial education content often surpasses public offerings, he cautioned, “Some content in the new media market such as YouTube is popular but requires caution.” He added, “It is essential to clarify investment principles such as ‘There is no easy way to make money’ and ‘High Risk High Return.’ One should not be tempted into unrealistic investments. When sharing investment information on stocks, futures, real estate, or crypto assets, it is necessary to verify sources and be careful to avoid fraud in investment advisory rooms.”

About Park Jae-wan, Chairman of the Economic Education Organizations Council...

Born in 1955, he graduated from Seoul National University’s Department of Economics in 1977 and earned a Ph.D. in Policy Studies from Harvard University in 1992. After passing the 23rd Administrative Examination in 1979, he began his public service career. He has served as a member of the 17th National Assembly, Senior Secretary for Political Affairs and Senior Secretary for National Planning at the Blue House, Minister of Employment and Labor, and Minister of Economy and Finance. Currently, he serves as chairman of the Economic Education Organizations Council, chairman of the Korea Peninsula Advancement Foundation, and chairman of Sungkyunkwan University’s board of trustees.