The Participatory Government began its first year facing numerous domestic and international challenges, such as the North Korean nuclear issue, the war in Iraq, and the SK Global corporate scandal. During the first year, however, the Government has seen significant accomplishments like stabilizing housing prices and the largest amount of exports in history. A detailed analysis of its first-year achievements are presented below under the headings of the economy, government, social sector, quality of life, inter-Korean relations and media. (Editor)


Economy

When the Participatory Government was inaugurated a year ago, a tough start was in the forecast for the new Administration due to a number of domestic and international factors, such as the North Korean nuclear issue, the Iraq War, the SK Global corporate scandal and the risks of credit-card companies. These problems threatened to destabilize the economy.

The Government, however, efficiently responded to these factors, removing market uncertainties, overcoming the problems of economic slowdown, preventing the decline of the nation's credit levels, maintaining stability in financial markets, and stabilizing the quality of life for the citizens.

As a result, the Korean economy during the year posted US$194.33 billion in exports, the largest ever in history, and is currently headed to an economic recovery, maintaining gross domestic product (GDP) at a 3 percent growth level.

As of February 15, 2004, the nation's foreign currency reserves amounted to US$162.58 billion, the fourth highest in the world. The reserves stood at US$3.9 billion in December 1997 when Korea took out an emergency loan of US$35 billion from the IMF. Despite the achievements, however, it is also true that an economic bi-polarization continues between exporting conglomerates and small/medium-size companies, posing a negative impact on the economy. And, the every-day economy is still somewhat stagnant, with credit-card delinquencies, a growing rate of youth unemployment and low levels of domestic consumption.



Moving into its second year, the Participatory Government will concentrate on creating more jobs and stabilizing labor-management relations as top priorities. It will pursue these and other economic policies on the basis of principles, unfettered by political schedules including the general elections in April 2004.


Government

The Participatory Government has drawn up "roadmaps," or policy directions, for most of its national agenda during the first year. The 253 roadmaps divided into seven areas are complete with specific action plans that will make the policy directions of this government more predictable than previous governments. Preparations have been under way to build the institutional infrastructures needed to implement the roadmaps. Based on these roadmaps, three special laws were enacted in 2003 with the aim of achieving balanced national development. These laws received positive reviews as they laid a cornerstone for a more effective government through decentralization. The government will usher in a new era of a per capita income of US$20,000.



There have been particularly noteworthy changes in government operations. First is the elimination of cronyism and favoritism within the year and introduction of a new personnel system, called system-based personnel administration. This will help a healthier, system-based personnel administration to take root. For the first time in history, the new government appointed a Senior Secretary to the President for Personnel and launched a Personnel Recommendation Committee to enhance the level of professionalism of high-ranking officials. Consequently, the chronic problem of heavy concentration of officials with the same regional background is resolved. In addition, a more balanced recruitment of women and science majors has become possible. A survey of birthplaces of government employees Grade 4 and above no longer reflects any concentration of employees with the same regional background. Instead, it shows balanced regional and demographic profiles.




Social Sector

There was initially a state of confusion soon after the inauguration of the Participatory Government because latent social conflicts were gushing into eruption amid high expectations for the new Administration. The Administration, however, held onto its beliefs and principles, thereby reducing labor disputes from the previous year. The number of illegal labor disputes went down by 57.6 percent, from 66 cases in 2002 to 28 in 2003, while workday losses on account of labor disputes similarly decreased 17.8 percent from 1.58 million days to 1.29 million days.



In addition, the new Administration has proved its abilities to mediate and resolve major social and economic confrontations through dialogue and compromise. Some examples include the five-day workweek, the financial consolidation of health insurances, the tunnel construction through the Mt. Sapae section of the Outer Loop of the Seoul Beltway, and the advice and consent of the National Assembly for the ratification of a free trade agreement between Korea and Chile.



The Administration is also making efforts to set up a management system in order to effectively prevent and resolve social issues and conflicts, and plans to complete laying a legal and institutional foundation required to put the new system into operation before the end of this year.


Quality of Life

In conjunction with the plans to build a new administrative capital and achieve balanced national development, the government expanded the nation's highway network by connecting remote provinces. Last year, 1,209 kilometers of highway were added to the network, bringing the total length of highways to 29,721km from 28,512km in 2002. The total length of four-lane expressways was extended to 3,104km from 3,060km.

In an effort to stabilize the daily lives of low-income families, the Government raised the proportion of long-term rental homes to 3.8 percent in 2003 from 3.4 percent in 2002. The Government plans to hike the ratio up to 10 percent by 2008. Although speculative heat spawned concerns about a real-estate price bubble, housing prices showed a sign of stabilization, posting a negative growth rate in the fourth quarter of last year. This development owes much to a series of positive measures to lower and stabilize real estate prices.

In the field of social welfare benefits, the number of the disabled who received grants rose to 140,000 in 2003 from 110,000 in 2002. The number of the elderly who were admitted to nursing homes also increased to 25,000 in 2003 from 22,000 a year ago.



The Government also digitalized useful and valuable information and knowledge resources in an effort to help citizens find information more efficiently. Under the project, the digitalization ratio of ¡°national knowledge/information¡± was hiked to 37 percent in 2003 from 28 percent in 2002. In each of the 16 specialized areas that were designated as national knowledge/information resources, detailed action plans were formulated to proceed with digitalization more vigorously. An integrated Internet portal website offers a comprehensive search engine (www.knowledge.go.kr) for the convenience of users.


Inter-Korean Relations

The Participatory Government also scored a lot in foreign relations in its first year, considering the North Korean nuclear issue it faced in the beginning of the Administration. The North Korean nuclear crisis was eased by the Six-Party Talks that has since been trying to work out a framework for a peaceful settlement.



The Participatory Government laid groundwork for a cooperative and self-reliant national defense system by newly instituting the concept of self-reliant national defense. The new concept involves maintaining a defense posture to resist potential attacks from North Korea, while positively participating in a multilateral security system based on the ROK-U.S. alliance. In accordance with the spirit of the inter-Korean summit of June 15, 2000, the Government steadily carried out regular inter-Korean meetings, expanded personnel/goods exchanges, brought together separated families and agreed to build a permanent meeting place for them.

Even though North Korea expressed its intention to dismantle its nuclear weapons development program and the United States declared that it was ready to accept North Korean demands for a security guarantee, last year saw disappointing results as the concerned countries failed to iron out differences over concrete action plans. The Participatory Government is prepared to exert maximum efforts to produce substantive progress in resolving the North Korean nuclear issue this year.


Media

From the outset, the Administration has vowed to take legal action against inaccurate and inappropriate media reports in order to build up a more constructive relationship between the Government and the media. Even though some criticized the move as "media-taming," the Government has tried to help provide accurate information on government affairs to citizens through accurate, responsible reporting.

The effort has resulted in a reduction of the number of inaccurate, inappropriate news reports by 60 percent compared to the beginning of last year. The Government also put in place a system of complying with constructive criticism by immediately correcting mistakes and formulating improvement plans.



The Government also adopted an open-door policy for the newsrooms of Cheong Wa Dae and central administrative agencies in order to guarantee fair reporting opportunities to all media outlets. Under the system, the exclusive newsroom membership was abolished and a briefing room was opened to provide more accurate information on government affairs.