French economist and columnist Guy Sorman said Tuesday that the global economy was still optimistic despite its continued economic slowdown and the financial struggles in the eurozone.

“The worst scenario in an (economic) crisis is to overreact to the crisis. Crises are bad, but they cannot be avoided,” the author of “Diary of an Optimist” said in a global business forum co-hosted by the Institute for Global Economics and Samsung Electronics.

Sorman stressed that economic recovery requires a stable currency and the high quality of state institutions rather than a free market economy and cultural factors. 

“We must not have illusions about the free market and crises, but that’s part of the system. Key to the economic growth is to have quality public institution ― a good, reliable state, bureaucrats, reliable justice, independent central bank, and so on.”

Citing economist John Taylor, Sorman said that stable, reliable economic rules are more important than policies. “Politicians of short-term views want to get results before election but entrepreneurs and investors look at the long term.”

The French economist criticized Korea’s main opposition party presidential candidate Moon Jae-in’s public pledge to make policies to create more jobs. “I have never seen a government creating jobs except in the public sector.” Artificially subsidized jobs are useless, he said.

Sorman pointed out that Korea’s vulnerability lies in the lack of diversification and creativity in business. The strength of Germany and the United States, for instance, is in diversified, innovative high-tech small businesses.

The French professor claimed that the energy sector which has been always undermined is now on the rise. “Shale gas is now excavated in a systematic way by the United States, but other countries will follow, like Poland and other (European) countries.”

“Enormous reserves of shale gas will make Eastern Europe completely independent from Russia. This is why Russia is now negotiating with South Korea, because they know that in the future they won’t to sell gas anymore to Western Europe, so they will try to sell gas to Japan and South Korea,” said ruling party lawmaker Chung Mong-joon who attended the forum.

“We need someone like him who can share an optimistic (economic) view when the rest go pessimistic.”

By Chung Joo-won (joowonc@heraldcorp.com)