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President Moon’s economic team should see ‘bigger picture’

President Moon’s economic team should see ‘bigger picture’

Posted May. 22, 2017 07:22,   

Updated May. 22, 2017 07:28


"He can sympathize hardships of people better than anyone else because he became the breadwinner of his family when young at the slum area of Cheonggyecheon in Seoul. He served as vice minister of strategy and finance and minister of the office for government policy coordination,” President Moon Jae-in said on Sunday when introducing Ajou University President Kim Dong-yun after tapping Kim for the deputy prime minister for economy.

When appointing Korea University Professor Jang Ha-sung as new presidential chief of staff for policy, Moon said, “Professor Jang is the most qualified person who will terminate the past paradigm focused on conglomerates and concurrently push to achieve economic democratization, income-driven growth and people-led growth.” President Moon appointed an orthodox economic bureaucrat with expertise in budgeting, who is well aware of the socially unprivileged’s hardships as the economic commander, and a civic activist and scholar who can push for chaebol reform as the presidential chief of staff for policy.

Jang was nicknamed "chaebol sniper" along with Fair Trade Commission Chief-nominee Kim Sang-jo by spearheading a campaign to improve corporate governance and minority shareholders’ rights at civic group People’s Solidarity for Participatory Economy. In his book "Korean Capitalism beyond Economic Democratization" published in 2014, Jang talked about the problems of social polarization, irrationality of the labor market, and a weak welfare system, but the root of his thinking is chaebol reform. The presidential chief of staff for policy can wield power even stronger than the deputy prime minister for economy depending on the president’s intentions, given that he will comprehensively supervise senior presidential secretary for economy, senior presidential secretary for society and senior presidential secretary. Therefore, the business community is expressing concern about the combination of Jang Ha-sung and Kim Sang-jo, who have voiced hardline stances on chaebol reform.

A legendary figure who started his career as high school graduate, Kim has ample experience in state administration given his experience as senior presidential secretary for economy and finance and senior presidential secretary for state agendas under the Lee Myung-bak administration, and the minister of the office for policy coordination under the Park Geun-hye administration. Some watchers consider Kim’s nomination as deputy prime minister for economy as a surprise because he is a budgeting expert rather than macroeconomic policy among the former officials of the now-defunct Economic Planning Board. Kim should serve as a "balancer" who must examine impact on the economy from macroeconomic perspective that the Jang Ha-sung – Kim Sang-jo team’s chaebol reform drive will generate, and put the brakes when needed.

Currently, the Korean economy is facing a myriad of complex puzzles that cannot be resolved if the government blindly focuses on chaebol reform. Fortunately expectations for economic recovery are growing due to rebound of export and facilities investment, but uncertainty and anxiety for the future linger with the economy saddled in a low-growth trap. Reform may be important but the most pressing issues are economic growth, future growth engines, and jobs for youth. The deputy prime minister for economy and the presidential chief of staff for policy should join hands to ensure that the Korean economy regains vitality. As for economic policy, the presidential office should not try to grip everything but instead empower the deputy prime minister for economy to practically lead. Also, Jang himself should keep in mind that he is no longer a civic activist who chants slogans on the street but a command central who spearheads policy for the nation. He is urged to consider chaebol as partners rather than the target of reform, and dispel concern facing the business community.