New eco­nomic team

It is time to pro­mote dereg­u­la­tion, in­no­va­tion

The Korea Times - - OPINION -

Pres­i­dent Moon Jae-in is in the process of form­ing a new eco­nomic team af­ter sack­ing his chief eco­nomic ad­viser and fi­nance min­is­ter Fri­day. His move is ap­par­ently aimed at rein­vig­o­rat­ing the econ­omy which has con­tin­ued its slow­down.

Moon nom­i­nated Hong Nam-ki, a ca­reer eco­nomic bu­reau­crat who is cur­rently serv­ing as chief of the Of­fice for Gov­ern­ment Pol­icy Co­or­di­na­tion un­der the Prime Min­is­ter’s Of­fice, to re­place Kim Dong-yeon as fi­nance min­is­ter and deputy prime min­is­ter for eco­nomic af­fairs.

The Pres­i­dent also ap­pointed his so­cial af­fairs sec­re­tary Kim Soo-hyun to suc­ceed pres­i­den­tial pol­icy chief Jang Ha-sung. Moon had to sack Jang, the ar­chi­tect of his much-avowed “in­come-led” growth pol­icy, as Jang has come un­der se­vere crit­i­cism for bring­ing about eco­nomic woes by putting the top pri­or­ity on wealth dis­tri­bu­tion and in­clu­sive growth.

The re­place­ment of Kim and Jang was in­evitable not only be­cause of their pol­icy fail­ures, but also be­cause of their rift over how to re­vive the slump­ing econ­omy. For a lit­tle over a year, the two have clashed fre­quently over de­tails about how to gen­er­ate jobs as well as boost eco­nomic growth.

Against this back­drop, the pub­lic has high ex­pec­ta­tions that the new eco­nomic team will do bet­ter than the cur­rent one to speed up eco­nomic re­cov­ery. Of course, chang­ing only the min­is­ter and the pol­icy chief does not nec­es­sar­ily lead to a turn­around of the econ­omy. That’s why we call on the Moon ad­min­is­tra­tion to come up with a new pol­icy and a new strat­egy for sus­tain- able growth.

In this sense, the reshuf­fle of the eco­nomic lineup should not be in­tended only to ease the pub­lic’s deep dis­sat­is­fac­tion over the gov­ern­ment’s poor eco­nomic per­for­mance. For this rea­son, Pres­i­dent Moon needs to over­haul his in­come-driven growth for­mula which has ag­gra­vated the eco­nomic sit­u­a­tion de­spite its good in­ten­tions of cre­at­ing more jobs and in­creas­ing wages, es­pe­cially for the work­ing poor.

Moon should re­al­ize the in­come-led growth pol­icy has brought about se­ri­ous ill ef­fects of cut­ting the num­ber of new jobs dras­ti­cally and re­duc­ing the in­come of the poor. The pol­icy has also caused pro­duc­tion, con­sump­tion and in­vest­ment to fall con­sid­er­ably, prompt­ing the econ­omy to lose steam rapidly.

We rec­om­mend the lib­eral ad­min­is­tra­tion shift its fo­cus from in­clu­sive growth to dereg­u­la­tion and in­no­va­tion in or­der to en­cour­age en­trepreneur­ship and bring back eco­nomic vi­tal­ity. Of course, this is not to say Moon should give up his in­clu­sive growth pol­icy. In­stead, he needs to deal with the more ur­gent tasks of pre­vent­ing the econ­omy from slid­ing into re­ces­sion and find­ing ways to sus­tain growth mo­men­tum.

The Moon gov­ern­ment also must avoid re­peat­ing past mis­takes that arose from the pol­icy fric­tion be­tween Kim and Jang. To this end, it ought to es­tab­lish an eco­nomic pol­icy con­trol tower to be led by the fi­nance min­is­ter, not by the pres­i­den­tial pol­icy chief. Oth­er­wise, the next eco­nomic team could also end up rud­der­less.

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