Signs are growing that President Moon Jae-in may replace his two top economic officials, as the administration faces increasingly stiffer challenges to manage the national economy. In all, the earlier Moon replaces the two the better it would be for the nation.
Deputy Prime Minister for Economy Kim Dong-yeon and Jang Ha-sung, chief policy adviser to Moon, have long faced public pressure to step down for the recent economic situation and conflicts over their views on key economic policies.
Judging from comments by senior members of the administration and the ruling Democratic Party of Korea, it is almost certain that Moon intends to replace the two. Some predict within this month or next month at the latest.
Publicly, presidential officials still deny news reports that Kim and Jang will be replaced soon. But the tone of their comments has been changing in recent days, with presidential spokesman Kim Eui-kyum hinting at a high possibility of their replacement by saying the president “has yet to make up his mind.”
News reports quoting named and unnamed sources of the administration and the ruling party already flourish about the names of potential successors for the two key posts. Minister Kim gave a strong indication that his exit was near, saying last week he would fulfill his responsibility until he steps down. The virtual lame duck period must be shortened for the sake of the national economy.
The Korean economy needs fresh vitality, for which new economic leadership is essential. Government projections for growth have been declining, with the latest set at 2.7 percent for this year. Economists say the growth rate may go down further next year.
Such a gloomy projection is not surprising, considering that all major indicators -- consumption, output and investment -- are on the downswing. Even the once-thriving auto industry is experiencing difficulties, following industries like shipbuilding and shipping.
The recent stiff fall in the stock market reflects public and investor concerns about the recent economic situation. These woes are added to blues in the job market, which has been kneeling at its worst levels in years.
Labor groups bent on pursuing workers’ lone interests are ignoring the harsh reality, with the nation’s largest umbrella union threatening to launch a general strike this month. The Korean Confederation of Trade Unions says its members will walk out unless the government further raises the legal minimum wage, ratifies some International Labor Organization conventions, reduces contingent jobs and reforms family-controlled chaebol.
Besides the need to tackle these and other urgent issues, conflicts that have often surfaced between Kim and Jang are another reason Moon should replace them. On the surface, Kim, as the chief economic policymaker, oversees the overall aspects of the economy, while putting his focus on the innovation-driven economy, a key element of the Moon administration’s economic policy.
But Jang, as the president’s chief economic adviser, has been flexing influence on major government decisions, especially those related to another key aspect of the Moon government’s policy, the controversial income-led growth highlighted by the rapid increase of the legal minimum wage and reduction of the workweek, among other things.
The biggest gap between Kim and Jang was exposed in their views of the effects of the higher minimum wage on the economy. That controversy strengthened public skepticism as to the unity and harmony of the Moon administration’s economic policy team and questions about who is really in charge of economic management.
Such a controversy had been anticipated because Kim, a career technocrat, pursues a practical line of policy whereas Jang, a progressive activist professor, is closer to Moon in terms of the economic ideological spectrum.
It is against this backdrop that without a shift in the Moon government’s economic policy, replacement of some economic policymakers and advisers would be meaningless.
It is always important for the president to choose the right men or women for the right posts. What’s more important at a time like this is the realization that many of the current problems with the economy are ascribed to the government’s obsession with income-led growth.