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Finance Minister Testy at Briefing

Posted November. 11, 2006 04:25,   


On November 9, Deputy Prime Minister and Minister of Finance and Economy (MOFE) Kwon O-kyu (photo) was explaining in the briefing room of the MOFE the results of the real estate policy meeting he had had with other ministers earlier in the morning, when his expression hardened.

“It was reported that the government has been delaying the expansion of four manufacturing facilities in the Seoul metropolitan area by not granting permission. A task force and a group of experts from the private sector are reviewing and working on it. By the end of November, it will be clear whether the government will okay the projects,” said the deputy prime minister.

He also commented on the expansion of Hynix Semiconductor’s Icheon plant in Gyeonggi Province, which has been postponed because of the permission issue. He explained, “The delay is because the company in question did not submit its official, detailed plan to the government as to their investment and funding.”

In other words, the deputy prime minister was saying that the delays should be considered necessary parts of the permission-obtaining process, and not as a lack of will on the part of the MOFE to relax regulations on the Seoul metropolitan area.

It is rather unusual for the deputy prime minister to proactively defend an issue about which no reporter asked questions. MOFE officials, who were in the briefing room with their boss, suggested, “Some say the Korean economy is being managed by only those from the president’s inner circle, and that the government doesn’t follow up its promises to liberalize regulations with action. The deputy prime minister must be trying to respond more aggressively to the critical comments.” According to the interpretation proposed by others, the fear that the MOFE might lose trust of the market played a role in Kwon’s attitude.

Contrary to general expectations, Kwon has showed toughness against the Fair Trade Commission (FTC) and its alternative to the current shareholding limits.

Before the FTC put forward its alternative to the shareholding limits, the deputy prime minister was calm, saying (at his October 19 press conference), “I have the same family name (with Kwon Oh-seung, chairman of the FTC), and we are collateral relatives. Everything will be fine.”

His composure was replaced with outright criticism against the FTC, however, when the FTC, despite requests and opposition of business leaders, pressed forward with a ban on circulatory shareholding and partial retention of the restraints on shareholding. He criticized, “The principle must be accepted that businesses be relieved of their burden.”

Some observe that Kwon’s stronger attitude is based on a sense of crisis that once he lets the FTC get its way over the shareholding limits issue, he will find it more difficult to exercise his leadership as the chief economist of his government because he has not been that successful since he took the highest job at the MOFE in July.

A senior MOFE official remarked on Kwon’s toughness of late, “His toughness seems somewhat belated. But I want him to be more active and determined and to play a bigger role in economic growth.”