SEOUL, KOREA – “Some people say that the welfare pledges the president-elect made should not be fulfilled, citing the global economic recession as an excuse. However, if so, there will be no growth,” said Ha-joon Chang, who has taught at the Faculty of Economics, University of Cambridge. Chang is the author of several widely-discussed policy books, most notably, “Bad Samaritans”.
Chang said, “Without proper welfare provision, there are many concerns today. People have a tendency to avoid having children and their career choices tend to be very conservative. Korea is now in a situation where higher welfare leads to economic growth.”
He pointed out that Korean welfare expenditure as a percentage of GDP is about 10%, the second to last among OECD nations. “The welfare expenditure of the U.S. amounts to nearly 20%, and European countries 25~30%, with Sweden, Finland, and France over 30%. Some say that as the European countries reduce their welfare expenditure, we should reduce it as well. However, it is the same as malnutrition patients no longer receiving meals as obese patients go on a diet.”
He said that, “As Korea is highly reliant on exports, the economy is always influenced by the global economic condition. So, instead of ignoring the welfare system (owing to bad economic conditions), we should find better ways to deal with this in a long term. This can be accomplished by strengthening the regulation of free markets or developing weak industries such as parts and materials to reduce the reliance on exports.”