Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Lee bets on same economic playbook despite Cabinet reshuffle
Finance Minister nominee Lee Hyoung-il, left, and Land Minister nominee Hong Jee-sun head to their respective offices in Seoul and Sejong, Monday. Yonhap
By Lee Hyo-jin
Finance, land minister nominees face challenges over tax reform, housing supply
President Lee Jae Myung is betting on the same economic playbook despite his Cabinet reshuffle, with career bureaucrats tapped to lead the ministries overseeing economic and housing policies, analysts said Monday.
Lee on Sunday nominated Lee Hyoung-il, currently the first vice finance minister, for finance minister, and Hong Jee-sun, currently the second vice minister of land, infrastructure and transport, to lead the ministry. The two were among six ministerial nominees announced in the reshuffle.
The changes come as both economic and housing policies have faced growing public criticism.
The departures of Finance Minister Koo Yun-cheol and Land Minister Kim Yun-duk were widely viewed as dismissals, with public sentiment turning against the Lee administration following the tax reform package and housing supply plans unveiled earlier this month.
However, the president's choice of replacements suggests that he is seeking to reinforce rather than overhaul his policy direction.
"The reshuffle of the economic policy team is about maintaining policy continuity while delivering tangible results," political commentator Park Sang-byung said.
"The president appears to be feeling a growing sense of urgency, as people's livelihoods and the housing market have seen little progress more than a year into his administration. By promoting vice ministers to top posts rather than bringing in politicians or lawmakers, he is signaling that he wants his policy agenda to be carried through and to produce results that people can actually feel," Park added.
President Lee Jae Myung speaks during a public event unveiling the government's youth policies at Cheong Wa Dae in Seoul, Friday. Joint Press Corps
The retention of presidential chief of staff for policy Kim Yong-beom further reinforces the president's message of policy continuity. Kim came under scrutiny over the introduction of single-stock leveraged exchange-traded funds, which were blamed for adding volatility to local stock markets. This had fueled speculation that he could be replaced in the reshuffle.
The president himself has also made clear that he intends to maintain his policy stance, including his hard-line approach to the housing market.
Hours after the reshuffle was announced, Lee wrote on social media that his government would "eradicate ruinous real estate speculation by any means necessary."
He also vowed to "correct unfair and unreasonable tax policies" that are deemed to encourage speculation.
The question now is whether the new economic team can deliver better results without a major change in policy direction.
The stakes are high for the two minister nominees, who are expected to face parliamentary confirmation hearings in the coming weeks.
The finance minister nominee will immediately confront a series of policy challenges, including addressing the backlash over the government's tax reform package and restoring public trust in housing policies.
He will also be tasked with ensuring that the benefits of semiconductor-led economic growth are spread across the broader economy, as more borrowers struggle with inflation and high interest rates.
For Hong, the challenge will be to increase the housing supply in the Seoul metropolitan area and resolve disputes with the Seoul Metropolitan Government.
The land minister recently held two meetings with Seoul Mayor Oh Se-hoon over housing supply issues, including a proposal to use part of Yongsan Park for housing, but have yet to resolve their differences.