First published in Korea Herald.
A recent media statement issued by the Seoul Metropolitan Government that got wide coverage had me in splits.
According to the note that was issued to mark the 10th anniversary of the Cheonggyecheon Stream Restoration Project -- which removed an elevated freeway and transformed it into a lush walkway through the heart of Seoul -- which was faithfully picked up by all of local media without any question, 190 million tourists annually visit the landmark.
“Some 190 million Koreans and tourists are estimated to have visited the stream since its restoration by former President Lee Myung-bak on Oct. 1, 2005. The number is expected to exceed 200 million by early next year.”
These figures were obviously cooked up by some government official and can be understandable to a certain degree -- making extrapolations based on certain data collected over a few days every year are part and parcel of economic studies. But what took the cake was the detailed breakup of the nationalities of people who visited the stream.
We are told that from 2011 to August this year, 1.8 million tourists from China, 399,000 from Thailand, 256,000 from Japan, 133,000 from Taiwan and the U.S. and 290,000 from the rest of the world visited the stream.
There are no details of how the estimation was arrived at or the methodology used. But that didn’t deter the news from getting wide coverage.
First, keep in mind that the stream is close to 6 km long with 22 bridges and has various entry points. Ordinary residents (including expats) who work in the bustling business district have to cross the stream whenever they leave their office to go for appointments, coffee, lunch or transit back home.
Second, there is no single entry point and entrance gate where one can sit and take count of the number of people visiting -- to extrapolate based on the average of a few days.
Third, since there is no entrance or record keeping, how can one be sure that the person who strolls across the stream is from China, India, North America, Europe or Timbuktu?
But the SMG was confident enough to dish out the numbers and the local media was complacent enough to take it at face value.
The reason I have brought this up is not because I do not trust the government. But I do not blindly trust what the Korean government officials say with regard to economic projections of their pet projects. No one should.
Recently, the government designated Aug. 14, a friday, as a temporary holiday -- since the actual 70th Liberation Day fell on Saturday -- to increase domestic consumption. Finance Minister Choi Kyung-hwan grandly announced that it would increase domestic spending to around 1.3 trillion won ($1.1 billion).
“When this happens, local companies will also earn more and will require more staff. In turn, they’ll need to hire more employees. The holiday will encourage a ‘halo effect’ throughout South Korea,” he said.
Absurd as it was -- one extra day off generating so much economic benefit to pull the country out of its economic misery -- no one questioned him.
The government logic was that it would enhance the people’s nationalism and encourage domestic consumption. With the economy greatly affected by the MERS outbreak and other external factors, it could use a boost -- in the form of a nationwide holiday with plenty of activities and events in store for the public as well as tourists.
No questions asked … the local economic reporters dutifully reported it, and it was taken as gospel.
Same thing happened with the “Korea Black Friday,” which was announced with much fanfare.
Unimaginatively named after the U.S.’ big shopping day after Thanksgiving, the largest-ever sale event -- involving about 26,000 stores encompassing department stores and online shopping malls from Oct. 1 to 14 -- was supposed to “revitalize the economy.” Nothing of that sort has happened.
When it was announced, no questions were asked. All the questions are being raised now when it has proved to be a damp squib and the government is scrambling to dub it a success.
The same goes for the government policies to ease youth unemployment -- the nation’s jobless rate for people between the ages of 15 and 29 came to 8 percent in August, much higher than the headline unemployment rate of 3.4 percent -- by forcing companies to introduce the wage peak system.
The wage peak system advocated by the government calls for people nearing retirement age to accept lower wages with the money saved by this arrangement to be used to hire new employees.
Many companies have announced the launch of this new wage system under pressure, but no one is asking how effective it will be in getting over the main problem -- youth unemployment.
I think it is a knee-jerk reaction and is not the “magic formula” to get the youth jobs. More so, when the announcements by the chaebol are just a headline-grabbing tactic with very little changing on the ground. As was the case with the “shared growth” hyperbole.
This trend is so common -- as observed in my 11 years as a business journalist here -- that one has learned not to go by news reports about economic projections of benefits that policies will achieve.
Not that questions are never raised. The editorial writers do a splendid job doing that and pointing out the lapses. But if local economic news articles have to get credibility, the reporters on the ground need to ask the uncomfortable questions to government officials before parroting their statements -- as they do in other advanced democracies -- without wondering whether they will upset the powers that be.
One can start trusting the government economic projections only when reporters -- not just editorial writers -- start confronting government officials with uncomfortable queries and get their response instead of simply reporting their grand promises.
Monday, October 12, 2015
First published in Korea Herald.