MBnomics Making a U-Turn?

President Lee Myung-bak By Yoon Ja-young Staff Reporter The Lee Myung-bak administration is making a U-turn from its motto of "business friendly" to "working-class friendly." The drastic turn, however, is drawing complaints from both sides. The most recent example is the victory of local merchants over retail conglomerates. The merchants have been in conflict with retail giants E-Mart, Lotte Mart, and Home Plus, which have advanced into their neighborhood niche with their "super supermarkets." After a series of protests by small merchants and President Lee's visit to a local traditional market where he listened to store owners' complaints that conglomerates were threatening their livelihood, the government apparently sided with small merchants. Those wishing to open new outlets must now get permission from local government. The incident could indicate that the Lee administration is turning toward the working class. However, concern is growing among economists that such policies may be populism. "The government shouldn't abandon principles for short-term popularity. It persuades people with its own principles and clear vision," said Sungshin Women's University professor Kang Seog-hoon. The President, who won the election on a promise that he would save the economy, held up such mottos as "business friendly," "market friendly," and "small government," which are typical of neoliberal policies. Taken from his initials, MBnomics underwent major facelifts due to the changing economic environment both at home and abroad after his victory in the presidential election in December, 2007. The global crisis pushed the economy into a dismal condition, and the collapse of the working class made him unpopular. The governing Grand National Party is afraid that this will lose it votes. The President has recently been stressing his concern for the working class, but some measures are making businesses wonder whether the administration is "business friendly." The government had planned to expand its tax deductions on corporate investment to help businesses, but recently decided against it. The administration made the U-turn upon criticism that it was cutting taxes for the rich and large businesses at the sacrifice of the working class. The snowballing fiscal deficit made it look for tax sources, and businesses that expected a tax deduction fell victim to this. chizpizza@koreatimes.co.kr