S. Korean President Fires Economic Policy Chiefs
SEOUL (Dispatches) - South Korean President Moon Jae-in sacked two top economic officials on Friday to jump-start his income-based growth policy, even as his lofty wage hikes ended up hurting the jobs market amid a lackluster economy.
The Blue House spokesman announced the removal of Economy and Finance Minister Kim Dong-yeon and chief of staff for policy Jang Ha-sung, the two men who had been at the control tower of Moon’s economic policy.
Kim, a pro-growth economic bureaucrat, had spatted with Jang, an academic more focused on reducing inequality, leading to speculation that they would be removed before year-end, upon passage of next fiscal year’s national budget.
The final nail in the coffin apparently came on Wednesday when Kim told lawmakers that he did not agree that the economy was in crisis. Kim instead painted the situation as a “crisis in political decision-making concerning the economy,” which many interpreted as a broadside against Moon’s government. Moon was forced to act quickly to contain the political fallout. Hong Nam-ki, most recently minister of the Office for Government Policy Coordination, has been named to replace Kim as economy and finance minister. Hong, also a veteran economic bureaucrat, will officially take office after a parliamentary hearing.
Jang’s replacement, social policy presidential secretary Kim Soo-hyun, assumes his new post immediately. As an expert in real estate issues and a policy guru, he is one of Moon’s closest aides. As a staunch liberal, Kim Soo-hyun is expected to advance the “income-driven” growth policy that aims to bolster the economy through job growth and wage increases.
But Moon’s redistribution-focused policy is far from a success. The economy has decelerated in part because of the 16.4% minimum-wage hike implemented in January.
Such small businesses as convenience store franchises and eateries have stopped hiring workers in response.