The survey took place from December 14th 2010 to 23rd through the EAI online survey system. As many as 72 out of 100 representative scholars in Korea participated in the survey.
A half (50.0%) 0f the 72 respondents said there is a quite high possibility of a repeat of the financial crisis within a decade, and 34.7% said there is a very high possibility. In conclusion, a total of 84.7% of the participants saw the possibility of another crisis.
The percentage rose by 2.0% points compared to 82.7% last year. In spite of ongoing recovery, experts seem to have raised cautions against economic outlooks.
For preventive measures, the respondents expressed preference toward regulations on short-term speculative capital (35.2%), expansion of foreign exchange reserves (18.3%), increases in currency swaps (16.9%) and tighter supervision of financial authorities (14.1%).
“Unpredictable capital movements, leveraging of derivatives, and volatile financial bubbles have always been factors reducing the Korean economy to an unstable state,” said Professor Hee-ho Kim from Kyungpook National University. “Korea needs to impose effective monitoring of international capital movements and restrictions on short-term capital transactions to pursue more stability,” he advised.
The Lee Myung-bak regime, now moving on to its fourth year, received a 74 point score out of a 100 for its economic performance. This is considerably higher than its grades in 2008 (48 points) and 2009 (66 points), and hints at more approval and recognition for salient economic policies by the government.
Looking at more detailed policies, the hosting of the G20 Seoul Summit received the highest mark (4.5 points out of 5) for approval, followed by stable macroeconomic policy (4.0 points), FTA and trade policies (4.0 points), and preventative measures against another economic crisis (3.8 points). Meanwhile, creation of new jobs (2.9), balanced regional development (3.0), and working class-friendly policies (3.1) were placed in the lower end.
Geopolitical risk (25.5%) was chosen as the biggest menace for the Korean economy, followed by fiscal and financial crisis in Europe (16.6%) and slowdown in China’s economy (13.1%).
[Written by Hyuk-hoon Chung - Su-hyun Song, Samji Chung / edited by Soyoung Chung]