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New economic team should revitalize the economy

Posted November. 10, 2018 07:28,   

Updated November. 10, 2018 07:28


South Korean President Moon Jae-in named Hong Nam-ki, minister of government policy coordination, as deputy prime minister and strategy finance minister, and Kim Su-hyun, senior presidential secretary for social affairs, as policy director. There is consensus that Hong is a neutral economic official as he served in the Economic Planning Board. As former aide to the late President Roh Moo-hyun, Hong experienced enough to be recognized as a key person. Since the inauguration of the current administration, Kim has led efforts to resolve real estate, denuclearization and education issues.

"The fruits of collective efforts have been gathered by large companies with smaller businesses left behind," President Moon said in a meeting with officials from the president office and the government and economic leaders after designating his new economic team. "The working-class economy was hit hard by foul playing, privileges and corruption, which exacerbated wealth inequalities." By his remarks, the president clearly ordered the new economic team to set fair economy as one of key policies along with income-led growth and innovative growth so that the fruits of growth can be shared by everyone in society with fair competition becoming the norm.

There are numerous issues, such as the worst job market since 2008, manufacturing decline, and the deteriorated growth engines, to be tackled by the newly set economic team. “Fair economy” should be realized in the process of developing the economy. However, with another economic crisis looming around, it can put pressure on businesses. There are concerns over new regulations such as the cooperative profit sharing system, which was met with business opposition.

The president office Cheong Wa Dae said that economic policy will be managed by the deputy minister while an "inclusive country" will be outlined by the policy director. However, there is a possibility that the role of Cheong Wa Dae will only become bigger in national governance due to the nomination of Hong Nam-ki with a smooth working style. Administrative officials implicitly complain that national governance is centered around by Cheong Wa Dae. In that sense, Prime Minister Lee Nak-yeon should take a balanced approach to the economy by serving as a control tower for the cabinet.

The new economic team should keep in mind that merely pressuring businesses cannot add more jobs, which only make economic conditions worse. It is necessary to change not only persons in charge but also policy direction to revitalize the economy. However, President Moon is being put too much focus on “economic democracy,” only shattering expectations about economic improvement. At least, ideologies should be excluded from economic policy, and instead, practicality should have priority to restore the economy.