Go to contents

[Editorial] Carbon Copy Finance Minister

Posted July. 13, 2006 03:00,   


At the National Assembly Finance and Economy Committee’s confirmation hearing held on July 12, Deputy Prime Minister for Economy appointee Kwon O-kyu said, “It is inevitable to adopt strategies for balanced growth,” downplaying the significance of economy boost package. In doing so, he revealed that his perception of the reality is not different from that of Han Duck-soo, his predecessor. It is a far cry from the public sentiment expressed in the May 31 local election, and exactly reflects the “unchanging code” of Cheong Wa Dae.

If that is the case, there is no reason to replace the deputy prime minister. Appointee Kwon’s answers, “Job creation is a foundation of balanced growth,” and, “We should refrain from artificial economic stimulus,” sound familiar. It’s because he was echoing what Cheong Wa Dae and Han have repeatedly said. What the public has been waiting for is not hearing the finance minister appointee mention “balanced development,” a phrase that the Roh Moo-hyun administration has repeated over and over.

The Korea Chamber of Commerce and Industry conducted a survey of 300 businesses located in the Seoul Metropolitan area. With regard to policies executed during the first half to revive the economy, they gave 2.58 points on average on a five-point scale. A student would have been flunked with such a grade. Even the ruling Uri Party is demanding changes to policies to reinvigorate the economy and setting forth their own ideas. If the deputy prime minister appointee was to adhere to policy directions of his predecessor, he would be turning a blind eye to the reality of the economy.

Appointee Kwon said, “It is desirable to maintain the underlying tone of current real estate policies so as not to undermine the equality of taxation.” He added, “If the government considers additional complementary measures, it will likely to send a big signal to the market.” However, maintaining the consistency of failing policies is not a way to achieve both the stabilization and revitalization of the housing market by any means. It is not “equal taxation” at all to impose a “tax bomb” on a household with one house just because the price of the house exceeds 0.6 billion won.

On July 12, Lee Seong-tae, the Bank of Korea governor, said, “Businesses have a lot of cash, but they are reluctant to make investments. That is the biggest problem in the long term.” Private economic research institutes are criticizing economic policies that incorporate regulations, not incentives, as means to revive the economy. If appointee Kwon was to try to live up to “Cheong Wa Dae’s code,” using words that are palatable to the president while keeping those structural problems under the carpet, he is not qualified as a deputy prime minister who is supposed to lead the economy’s recovery and he would be swayed by Cheong Wa Dae, just like his predecessor, Han Duck-soo, has been.