http://www.project-syndicate.org/commentary/danny-leipziger-proposes-a-strategy-for-south-korea-to-avoid-japanese-style-economic-stagnation
http://www.project-syndicate.org/commentary/danny-leipziger-proposes-a-strategy-for-south-korea-to-avoid-japanese-style-economic-stagnation/chinese

http://origin-realtime.zaobao.com.sg/forum/bilingual/story20140210-308553
http://www.caogen.com/topic/57254.html


PROJECT SYNDICATE (THE WORLD'S OPINION PAGE) - ECONOMICS + WORLD AFFAIRS

Danny Leipziger
Danny Leipziger, Professor of International Business at George Washington University and Managing Director of the Growth Dialogue, was a vice president of the World Bank and served as Vice Chair of the Spence Commission on Growth and Development.

FEB 2, 2014 - South Korea’s Japanese Mirror

Given the daunting challenges facing Japan, one can only admire Prime Minister Shinzo Abe’s determination to end the country’s two-decade-long period of economic stagnation. His strategy – the “three arrows” of massive monetary expansion, increased government spending, and structural reform – is theoretically sound. But only one and a half arrows have been launched so far.

The stimulus package is being offset by consumption-tax hikes aimed at reducing Japan’s massive debt burden – a process that will lead many Japanese consumers to adjust their spending downward. The promised structural reforms of the energy sector, labor market, and competition policy have yet to be introduced, and appear unlikely to take effect anytime soon. Even more worrisome are larger immutable realities – like a rapidly aging and shrinking population – that will limit Japan’s economic growth in the coming decades.

But Japan’s problems are not unique. Indeed, its neighbor and historical rival, South Korea, is headed down a similar path. The difference is that South Korea may still have time to ameliorate these trends, and avoid a Japanese-style quagmire of permanent low growth and long-term decline.

South Korea – the seventh-largest trading country in the world, and one of the most prominent economic success stories of the last 50 years – is at risk of such a bleak future as a result, first and foremost, of demographics. South Korea’s working-age population is falling by 1.2% annually – the fastest decline among OECD countries.

While there are many reasons for South Korea’s low fertility rate, two economic factors stand out. First, household-debt levels are enormous, capturing a quarter of income, with mortgage payments taking the lion’s share. The ratio of housing prices to incomes is more than double that of the United States.

Second, South Korean families feel compelled to spend a large share of their income (10%, on average) on education. With households already saving only around 4% of their disposable income, compared to 20% in 1988, there is little room for additional expenditure.
A concomitant feature of South Korea’s labor market is that women’s labor-force participation rate – a paltry 33% for women aged 30-39 – is among the lowest in the OECD. This partly reflects the difficulty of balancing child rearing with work in South Korea, compared to, say, Europe or the US.

South Korea’s female labor-force participation rate is even lower than in Japan, where there are waiting lists for childcare. Moreover, South Korea has underinvested in day-care centers, with firms rarely offering childcare support. Given that South Korean women tend not to hold lucrative jobs, the cost of childcare is often prohibitive.

The recent increase in South Korea’s minimum normal retirement age has done little to improve the labor-market outlook. Wages in the small and medium-size enterprises (SMEs) that employ 88% of workers still lag behind those of major conglomerates, the chaebols; and the middle class is shrinking in terms of its share of earnings.

But South Korea does have some advantages over Japan. Although the government’s stimulus policies have increased the national debt, the debt/GDP ratio remains relatively low, at roughly 37%. Public debt in Japan, by contrast, exceeds 220% of GDP.

Moreover, despite South Korea’s dependence on exports, domestic consumption is robust. And ample spending on research and development, together with an unrelenting drive to be at the forefront of technological innovation, implies a brisk pace of innovation. This creates room to address one of the economy’s two main challenges: low productivity in services.

As it stands, productivity in services is six times lower than in manufacturing. The operations of South Korea’s chaebols – which dominate production, if not employment – should be adjusted to support productivity gains in the increasingly dominant services sector.

The key here, as in Japan, is to foster greater competition in services. If the chaebols continue to do their own advertising, financing, and IT, they will starve SMEs. A review of industrial concentration is warranted, as is a major government effort to foster SME growth in new ventures by offering incentives, ensuring access to capital, and lowering barriers to market entry. More employment in higher-end service jobs, especially for women, would also improve South Korea’s prospects considerably.

In the longer term, however, South Korea’s prospects hinge largely on the labor force. The rising dependency ratio – expected to exceed 50% by 2030, when 36% of the population will be above the age of 65 – could spell disaster for the country. Health-care costs will rise, increasing the strain on budgets. While increased immigration could help to ease labor-force pressures, it would be met with public resistance. In this context, potential growth may well fall back to the predicted 2.5% annual rate, even though the economy’s capital stock is in good shape.
South Korea has learned numerous positive lessons from Japan. It captured many of Japan’s export markets; it imported and adapted Japanese technologies; it employed similar planning methods; and the chaebols are an outgrowth of Japan’s zaibatsu corporate model.
Now, however, South Korea must learn from Japan’s negative experiences. Structural reform cannot wait. Nationalism should be channeled toward securing public support for deep economic and social reforms.

South Korea’s leaders do not have to look far to find out what will happen if they fail to address looming challenges quickly and resolutely.


日本是韓國的一面鏡子

考慮到日本所面臨的艱巨挑戰，我們對日本首相安倍晉三終結日本二十年經濟停滯的決心只能表示敬佩。他的戰略——由大規模貨幣擴張、政府增支和結構性改革組成的「三支箭」——在理論上是可行的。但他到目前為止只射出了一支半箭。

刺激計畫的效果因為旨在減少日本巨額債務負擔而增加的消費稅被抵消不少，提高消費稅將令日本消費者減少消費支出。能源領域、勞動力市場和競爭政策方面的結構性改革還沒有出爐，也似乎不會在近期實行。更令人擔憂的，是難以改變的更大現實——如快速老齡化且不斷減少的人口——這將成為未來幾十年抑制日本經濟增長的因素。

但日本的問題並不是獨一無二的。事實上，它的近鄰和歷史上的對頭韓國，也走在類似的道路上。區別在於韓國可能仍有時間緩和這些趨勢，並避免日本式的持久低增長和長期衰退的泥淖。

作為世界第七大貿易國和過去50年來最令人矚目的經濟成功故事之一，韓國有可能面臨暗淡未來的首要原因在於其人口。韓國的適齡工作人口以每年1.2%的速度下降，是經濟合作與發展組織（OECD）中下降速度最快的。

韓國的低生育率原因很多，但兩大經濟因素十分明顯。首先，家庭債務水平很高，吞噬了四分之一的家庭收入，其中最重的負擔在於按揭貸款。房價/收入比比美國多出一倍以上。

其次，韓國家庭將收入的一大塊（平均為10%）用於教育。考慮到家庭儲蓄佔可支配收入之比只有4%（1988年為20%），韓國家庭增加支出的空間極為有限。

韓國勞動力市場的另一特徵是女性勞動力參與率是經合組織國家中最低之一——年齡介於30至39歲的女性只有33%在工作。這部分是因為與歐洲和美國相比，韓國人在育兒和工作之間更加難以取得平衡。

韓國女性的勞動力參與率，甚至比幼兒中心排長龍的日本還低。此外，韓國在日間托兒中心方面投資不足，企業也很少提供這方面的幫助。韓國女性通常不會從事待遇優渥的工作，因此育兒服務對她們來說往往成本太高。

韓國還是有一些優勢

韓國最近提高了退休年齡，但這對改善勞動力市場前景來說只是杯水車薪。僱用了88%工人的中小型企業提供的薪金遠低於財閥（chaebols），中產階級佔國民收入的比重也在下降。

但相對於日本，韓國還是有一些優勢。儘管政府的刺激政策提高了國家債務，但債務/國內生產總值（GDP）比率仍相對較低，約為37%。相比之下，日本的公債水平超過GDP的220%。

此外，儘管韓國對出口的依賴度很高，但國內消費也很強健。充足的研發支出及對領先科技創新的不懈追求，為韓國帶來了強勁的創新步伐。這有助於應對經濟兩大主要挑戰之一：服務業的低生產力。

以目前情況來說，服務業的生產力比製造業低六倍。主導生產（如果不是就業的話）的韓國財閥的經營應該做出調整，以支撐日益重要的服務領域生產力的提高。

與日本一樣，關鍵是增加服務業的競爭性。如果財閥繼續自己包攬廣告、融資和資訊科技等，就會對中小型企業的生存形成擠壓。此外，韓國需要對產業集中度進行檢討，政府也應該提供激勵、確保融資渠道和降低市場進入壁壘，來推動新領域中小企業的成長。增加高端服務崗位就業（特別是女性就業）也能大大地改善韓國的前景。

但是，從較長期看，韓國前景的關鍵在於勞動力。依賴比率的上升——預計到2030年將突破50%，到那時，韓國人口中65歲以上的比例將達到36%——這可能有災難性後果。醫療成本將上升，導致預算吃緊。增加移民有利於緩解勞動力壓力，但會面對人民的反抗。在這樣的背景下，即使韓國資本存量形勢依然有利，潛在增長率也很可能回落到預期的2.5%年增長。

韓國從日本身上汲取了大量有益教訓。它奪走了許多日本出口市場；進口並改進日本的技術；採取了與日本類似的規劃方法；其財閥也來自日本的財閥（zaibatsu）模式。

但是，韓國如今必須從日本的負面經驗汲取教訓。結構性改革不能拖。民族主義必須予以引導，以爭取公眾對深度經濟和社會改革的支持。

如果不能快速、果斷地解決眼前的挑戰，韓國領導人只要看看近在眼前的日本就知道後果會是怎樣的。