[Column] "Worry About People's Happiness Rather Than Credit Ratings"

A public official, A, who had long been in charge of external affairs at the Ministry of Economy and Finance, worried about the credit rating as soon as the martial law was declared on December 3 last year. This was because he well understood how much damage a downgrade by global credit rating agencies would inflict on our economy. Having witnessed France, which had undergone political turmoil, already experience a credit rating downgrade, he was even more anxious.

Later, Deputy Prime Minister for Economic Affairs Choi Sang-mok personally sent a letter to the rating agencies and received a response that there was no problem with the Korean economy, but he still felt uneasy. He feared that while global rating agencies outwardly supported Korea, they might secretly be considering a downgrade. So, on the day of the rating agencies’ meeting, he pulled a representative aside and asked, “Is Korea’s credit rating really okay?”

The answer was unexpected. The global rating agency representative left him with the words, “Don’t worry about that; worry about the happiness of the Korean people first.” It was as if there was absolutely no problem with Korea’s credit rating.

He inferred that the sound fiscal policy stance greatly helped maintain Korea’s credit rating. The rating agencies cited the French Prime Minister’s no-confidence incident as a reason for the downgrade, mentioning the “worsening fiscal deficit situation.” The bloated debt pile amounting to 154 billion euros was a major burden. In contrast, Korea’s debt ratio is still relatively healthy. The fact that Korea is actually implementing expenditure restructuring also earned high marks from the rating agencies.

Korea’s robust bureaucracy is having a positive impact. From the day martial law was declared, economic leaders gathered to stabilize the volatile foreign exchange and stock markets. Despite the chaos, the Ministry of Economy and Finance proposed reform measures for opening the foreign exchange market and inclusion in the World Government Bond Index (WGBI). Various economic policies have been deliberated and approved at Cabinet meetings. Despite political vacuums, Korea showed the international community that its economy is still functioning.

If the two pillars of sound fiscal management and a strong bureaucracy collapse, it will negatively affect the credit rating. The voices calling for a massive supplementary budget filled with populist policies, the reality where urgent economic bills cannot even be discussed due to political issues, and the serious concern over threats to continuously impeach Cabinet members to neutralize veto power are all reasons for grave worry. While some political groups may benefit from such moves, the people suffer regardless of political orientation.

The international community is watching Korea closely. Therefore, the political sphere should refrain from policies or rhetoric that threaten our credit. It is not politics that should worry about the economy, but the economy that should worry about politics. Economic bureaucrats and entrepreneurs likely want to ask the political world this very sentiment. I want to return the words that official heard back to the political sphere: “Don’t worry about the economy; please worry about the happiness of the people first.”