Economy Minister candidate who couldn’t call himself an ‘economic control tower’

"Who is the economic control tower in the current government?"

As per usual, my initial thought was the 'Deputy Prime Minister of Economy and Finance.' People Power Party lawmaker Joo Ho-young posed this question during the confirmation hearing for Deputy Prime Minister Choi Sang-mok and Minister of Strategy and Finance held on Dec. 19. He inquired, "Will the Deputy Prime Minister of Economy and Finance take charge? Or will it be the senior economic advisor? Is the policy director going to assume the role?" Expressing concerns, he raised the issue that, with the creation of the position of Director of Policy at the ministerial level within the President's Office, in addition to the role of Senior Secretary to the President for Economic Affairs, there might be a risk of the Deputy Prime Minister not serving as the central coordinating figure and potentially being sidelined.

The responsibility assigned to Candidate Choi is that of economic leadership. The confirmation hearing request for Candidate Choi, submitted by the President, asserts, "Amid the ongoing global complex crisis, the role of the economic command center for ensuring stable economic management is more crucial than ever. The candidate possesses the capability to contribute to Korea's advancement into a globally pivotal nation."

The attempt to present it merely as an anecdote reflecting Choi's humility is disconcerting, especially in light of recent developments in the finalization of economic policies. Initially, the government expressed reluctance to increase the threshold for taxing profits from domestic stock trading to 5 billion won per stock. Despite ongoing reports of potential easing prompted by the President’s Office, Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho firmly stated on Dec. 12, "We are not considering it in detail." However, just nine days later, the standards for stock capital gains tax for major shareholders were unexpectedly relaxed.

Reports suggest that the President's Office was a driving force behind this decision. Millennials and Generation Z administrators within the Presidential Office reportedly strongly advocated for eliminating the stock transfer tax, emphasizing that it was a pledge made by President Yoon Suk Yeol and highlighting the challenges faced by individual investors amid market uncertainties. The President's Office is said to have accepted these arguments and subsequently took action after consideration. In this instance, economic principles appeared to have been set aside, and a boost to the stock market was pursued based on political judgment. Previously, individuals who held stocks worth more than 1 billion won were categorized as 'major shareholders' and subject to taxation. This tax policy led to repeated declines in stock prices as individual investors sold large quantities of stocks at year-end to avoid tax obligations.

Choi served as the senior economic advisor to the President until just a month ago, earning recognition as a 'genius bureaucrat.' Given his prior role, he likely understands the dynamics between the President's Office and the government. However, it is disconcerting that he appears to have struggled to assume leadership in shaping economic policies. This raises concerns that he may be perceived more as a 'follower' rather than an authoritative figure leading and coordinating economic strategies. Ironically, Choi had previously taken the initiative in 2016, as the Vice Minister of Strategy and Finance, to lead the reduction of the stock transfer tax standard for major shareholders from 2.5 billion won (KOSPI standard) to 1.5 billion won. His actions following his assumption of office will likely confirm whether he emerges as an economic leader or a follower.