One year ago, government economists said that the Korean economy would be able to recover its vitality in 2015 because the nation -- with no election set in the year -- would push for structural reforms, and there were favorable conditions such as the low price of oil, low interest rates and depreciation of the Korean currency.

President Park Geun-hye confidently said in her New Year’s news conference that the Korean economy would grow 3.8 percent in 2015.

But those predictions were too rosy, as the Korean economy expanded only 2.5 percent for the year, marking the fifth year with a growth rate of less than 3 percent. Considering the vast monetary easing and other pump-priming measures, this lackluster performance was all the more disappointing.  

It is highly likely that this year, too, the economy will remain in its low-growth trap. Park’s economic lieutenants say the economy will grow 3.1 percent in 2016. This projection is lower than the 3.6 percent forecast for the world economy, but private economists are skeptical of even this projection.

There are a combination of reasons for such dismal prospects. Externally, the growth of the world economy has been slowing down for years, the Chinese economy is not doing well either, and the low oil prices are further pulling down global growth.

Internally, our once proud industries like shipbuilding and steelmaking are being overtaken by Chinese competitors, while traditional rival Japan is taking advantage of the weak yen to boost the global competitiveness of its industries.  

In addition, structural reforms are not progressing as successfully as forecast by the Park administration. Korean exports contracted for the first time in five years, consumption is still sluggish and the problems of debt -- at all the household, government and public sector levels -- and the situation of marginal firms have reached dangerous levels.

This reality calls upon the nation to seek fundamental solutions, which should include, among other things, efforts to develop the services sector and seek a shift in strategy for major manufacturing industries.

The history of Korea’s economic development is identical to the history of light industries like textiles and then those of heavy industries like shipbuilding, petrochemical and steelmaking, which still remain the mainstay of the economy.

Korea cannot achieve a second leap by relying only on the traditional industries and without fostering the services sector. The manufacturing sector needs to learn lessons from the Chinese, who have been expanding their control of global markets through brisk offshore investments as well as mergers and acquisitions.

Korea also needs accounting firms, hospitals and financial firms with global reputations corresponding to those of Samsung and Hyundai Motor.