THE South Korean Government, which for all practical purposes has been absent without leave since President Kim Young-sam announced the re-organisation of public offices in early December, appears to be back at work.
Typically, December and January are the busiest planning months. The official macroeconomic targets for the year ahead are set and everyone else in this heavily regulated economy adjusts their forecasts and actions accordingly.
But because of public servant apathy this year the Government provided no information on how the economy would be managed until quite recently. The result is confusion and the stock market has suffered.
It is too early to state with confidence that this will change from now on, but the signs are encouraging. The Government has reported to the president its macroeconomic targets for 1995, and in contrast to the message delivered by Mr Kim in his presidential press conference, the Government will be less aggressive about combating inflation.
Instead of keeping price rises under five per cent for 1995, as Mr Kim promised, the Government intends to keep inflation in the five to 5.5 per cent range.
We believe the difference is significant. As far as economic management is concerned the key issue this year is how restrictive the policies will be.
