In the process of rapid industrialization, the Korean peoples material standard of living has generally improved with economic advances. Recently, however, the economy has begun to show signs of difficulties in both the domestic and international sectors. All of sudden, a severe economic crisis has swept the Korean peninsula around November 1997. It is expected that current economic difficulties will last for a while. At present Korea is facing a critical historical challenge: how should its institutions solve various economic and social problems that are the unfortunate by-products of the developments strategies in the three decades or so.
A proper cure for the present crisis is the implementation of a fundamental economic reform to resume elements of economic justice and people-centered development including the poor. In particular, a new Korean model of economic growth and social development which is conducive to the new era should be proposed. Economic policy in the future should place more emphasis on social equity rather than focusing entirely on the pursuit of economic growth. As a matter of fact, Koreas social development has not kept pace with economic growth. In particular, social security development lags behind their economic achievements. Continuously rising income has elevated peoples expectations for a higher quality of life, so the growth strategy needs to be supplemented with policy measures designed to improve the social welfare level.
Now that traditional economic policy is threatened by powerful forces in Korean society and by the Korean peoples interests, it is important to reconsider its role and functions in promoting economic welfare. human dignity, social solidarity, popular participation, and empowerment. The old economic policy regime in Korea is under siege and is being recast in a new mold, simply because it is mainly focused on economic growth. A new paradigm of economic policy is required. Since the policy focus should be on quality of life improvements, a fundamental reform should be made by which corruption and rent-seeking would be eliminated.
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