Make no fuss about narrowing trade surplus

The nation has posted a trade surplus of $770 million during the first four months of this year. This is only a tenth of what it recorded in the same period last year, leading many to fret about the balance of payments turning into the red. (See related article in page 2.)


Some worry further that once the trade balance goes into deficit, the $80-billion-strong international reserves will evaporate in no time, precipitating the economy into another round of currency crisis.


The press, as usual, paints the picture in gloomy colors. It warns of rising imports in "luxury goods" including cameras, wines and lobsters. It whines about the growing number of Koreans traveling overseas by reporting that their ranks increased 14 percent in the first quarter from the corresponding months last year.


We all know that it's the same tune we have been accustomed to hearing for the last several decades: the country needs more belt-tightening to be more competitive in the world market, the country's economy will collapse if foreign nations press for more market opening, foreign investors are conspiring to ruin the nation's financial markets, and so on, and so on.


All this somewhat exaggerated fuss may have come from the so-called "fragility complex," meaning this economic structure of ours is so fragile that any external shock will easily break it. This case of paranoia has become more serious after the nation experienced the real crisis in 1997 when many people attributed that economic calamity to a back-room conspiracy by a handful of international financiers plotting to take over the world.


Korean consumers now deserve better living standards than before. They have sacrificed so much to make this country prosperous. They have every right to buy the things they want, whether domestic or foreign, if they can afford the things they want. No one can force them not to buy quality imports or to not travel overseas under the pretext of preventing foreign exchange leakage. Korean manufacturers, they should realize, can't keep domestic consumers captive for good.


Besides, the latest trade statistics reveal more than what they may first seem. At first blush, the figures show an alarming trend. During the January-April period, imports ballooned to $52.22 billion, a 50.6-percent increase from the same months last year while exports rose 26.9 percent to $52.99 billion. The $770 million surplus for the four months is a mere 6.4 percent of the target trade surplus of the year.


According to the Bank of Korea, however, the composition between capital good imports and those of "pure" consumer goods has somewhat improved in the quarter. The ratio of consumer goods to capital goods in the total imports for the first quarter has been 22.6 percent, lower than that of the fourth quarter last year which posted 24.1 percent. That means the nation's manufacturers imported more equipment and parts and components to increase their productivity and output.


As long as the share of capital goods is sufficiently higher than that of consumer goods (and luxury items of course), as is the case now, the nation's economy can be deemed healthy.


We don't need false alarms any more. Let us be proud of what we have achieved until now and move on to make another round of success. People are not so stupid that they need constant warnings that we are on the brink of collapse. It's time to be a little more optimistic about the nation's future. We really deserve to be happy about what we are now.