[Editorial] Over the hump?

Korea’s per capita income broke through the $20,000 mark for the first time in 2007. Buoyed by the nation’s outstanding economic performance, many Koreans believed it was a matter of time before per capita income, posted at $21,632 that year, reached $30,000.

They believed Korea could pull it off in five years, as Japan had done. After all, the nation had been successfully benchmarking Japan for its economic advancement.

But it did not take long before they realized their optimism had been misplaced. Contrary to their expectations, Korea remained stuck in the same trap as some other countries that had strived in vain to generate $30,000 per capita income.

Per capita income dropped below the $20,000 level during the global financial crisis that started in 2008. After recovering from the setback in 2010, it hovered to around $22,000 in the next two years.

The good news is that this year’s per capita gross national income is provisionally estimated at $24,044, up almost 6 percent from 2012. This unexpectedly high increase should boost Korea’s morale and confidence in its capacity.

But Koreans are more wary this time, with economic analysts advising caution. Some analysts say it may take as many as seven years for per capita income to reach the $30,000 level should it lose its economic momentum, as it did during the previous financial crisis.

The economy has a long way to go until it regains vitality. The central bank assumes that gross domestic product will have grown a mere 2.8 percent this year.

Yet, this would mean the U.S. dollar-denominated per capita income marking a substantially higher rate of growth ― 5.9 percent. That would not be possible were it not for the Korean currency’s gain against the dollar, which an analyst says accounts for almost half the growth rate. Despite the slow GDP growth, the won has been gaining as the nation has continued to generate monthly current account surpluses for nearly two years.

Are all Koreans better off now, as per capita income is on the rise? Not necessarily. It is the rich that benefit more than the poor, as shown by statistics. The disposable income of the top 20 percent of households is 5.05 times that of the bottom 20 percent this year, up from 4.98 times last year.

Another indication of uneven benefits is that household debt for the top 20 percent has declined, while that for the bottom 20 percent has sustained a sharp increase. At the end of the first quarter of this year, the average household debt for the bottom 20 percent was at 12.46 million won, up nearly 25 percent from a year ago.

Nonetheless, it should be a lofty goal for Korea to join the small group of countries with $40,000 or more in per capita income after surpassing the level of $30,000 as soon as possible. But an equal emphasis should be given to a fairer distribution of wealth in implementing welfare, taxation and other economic policies.

The government, which claims it has striven in this regard, should be reminded that Korea has the fifth most unequal distribution of wealth among members of the Organization of Economic Cooperation and Development.