Nearly Halfway Through Her Term, Park's Chance to Improve on Lee's Economic Record is at Risk
July 1, 2015
As South Korean President Park Geun-hye nears the halfway point of her five-year term, the country’s economy for the second year in a row is being weighed down by an unexpected event. Last year, it was the sinking of a ferry that resulted in the deaths of more than 300 people. Today, it’s the onset of a deadly disease that, six weeks after its arrival, is getting controlled.
Government officials acted more quickly to acknowledge and counter the negative economic effect of the spread of MERS, or Middle East respiratory syndrome, than they did the sinking of the Sewol ferry. They encouraged people to keep up their routines and to not let fear drag down the economy.
Their efforts, at best, produced mixed results. Tourism has been gutted, schools and after-school cram centers were closed and restaurants emptied. (As after the ferry sinking, mom-and-pop owned businesses fared much worse than the country’s manufacturers and big companies.) And when the Bank of Korea’s policy-making committee met in mid-June, it decided to cut the nation’s interest rate for the second time this year, citing the effect of the disease. The rate is now at a record low of 1.5 percent.