President Moon changes economic control tower, no policy change

Lim Chang-won Reporter Posted : 2018-11-09 15:35 Updated : 2018-11-09 15:35
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[Yonhap Photo]

SEOUL -- President Moon Jae-in sacked two top economic officials, including Finance Minister Kim Dong-yeon, who have been at odds over how to spur growth. The appointment of new policymakers revealed no change in his policy.

Kim has been at odds with Chang Ha-sung, a senior presidential aide in charge of economic democratization, who has been well known for his study in economic injustice brought by South Korea's powerful family-run conglomerates, or chaebol.

The outgoing finance minister advocated a flexible policy while Chang showed no compromise. The two were picked in May last year to head the economic control tower of Moon's administration.

Hong Nam-ki, 58, who headed the Office for Government Policy Coordination under the prime minister, was made new finance minister. Hong is a career economic official who had long involved in state budget planning and served as vice science minister in 2016.

Chang was replaced by Kim Soo-hyun, a senior presidential advisor for social affairs, who served as vice environment minister in 2007 and headed the Seoul Institute, a research body tasked with solving environmental and other urban problems of Seoul from August 2014 and February 2017.

Kim Soo-hyun, 56, played a key role in rolling back an easy housing-market policy pushed by Moon's jailed predecessor, Park Geun-hye, in a bid to curb a steady and excessive rise in home prices.

A high level of household debt has been viewed as a potential "time bomb" for the economy. However, demand for mortgage loans, the main culprit for soaring household debt, has been on the rise despite tough lending rules and high taxes on speculative transactions.

Since he took office in May last year, Moon has abandoned an old growth model led by South Korea's family-run business groups, known as chaebol, which were once described as the engine of prosperity and credited for powering the post-war economic miracle, despite their autocratic leadership and dynastic succession practices.

Moon is now under pressure to present a new growth model due to a relatively slow economic recovery. However, he vowed to go ahead with his trademark policy of "fair economy" so that South Korean can achieve inclusive growth, an economic justice and the fair distribution of wealth.

"As the economy grows, wealth inequality deepened and companies lost their international competitiveness," Moon said Friday at an economic conference, calling for fair competition to "share the fruits of growth fairly."

"Although we have a long way to go for the institutionalization of a fair economy and the establishment of economic democracy, the government is doing its best to create a new economic order," Moon said, urging big companies to enhance corporate transparency and fair competition.