ED Time for policy change
Replacing top aides will not help revive economy
President Moon Jae-in appointed new top economic aides Friday in an apparent bid to produce tangible economic achievements ahead of the general election next April. He might have felt a sense of crisis because he has failed to make any progress in turning around the slumping economy.
Moon replaced senior presidential secretary for policy Kim Soo-hyun with Fair Trade Commission chief Kim Sang-jo. Moon also named First Vice Finance Minister Lee Ho-seung to succeed Yoon Jong-won as senior presidential secretary for economic affairs.
Announcing the replacements, Cheong Wa Dae spokeswoman Ko Min-jung said Kim Sang-jo's experience in academia and in the civilian sector would help him set policies to ease the plight of the people amid the prolonged economic downturn. She also expressed hope that Kim would establish a fair economy by taking advantage of his experience as an antitrust regulator.
Ko said Lee would play a role in speeding economic recovery by riding out growing economic uncertainties at home and abroad. Lee, a career bureaucrat, has worked at the finance ministry for nearly 30 years. He served as a presidential aide from 2017 to 2018.
The reshuffle gave the impression that Moon virtually sacked his current economic aides by holding them accountable for failing to implement his three major economic policies for income-led growth, innovation and a fair economy. The new appointments came unexpectedly, but it was not surprising given the deteriorating economic conditions.
If the government cannot boost economic growth, President Moon will certainly face mounting criticism for policy failures. His much-avowed income-driven growth policy has already taken a beating because so far it has not achieved its intended outcome of creating more jobs, bringing higher wages, promoting consumption and thereby raising economic growth.
More worrisome is that the slumping economy shows few signs of getting better anytime soon. The country suffered a 0.4 percent contraction in its GDP in the first quarter of the year from a year before, the worst performance in a decade. Exports, the main pillar of the Korean economy, have been on a six-month downward march. Domestic demand and facility investment have continued their sluggish trend.
These downside risks have now been amplified by negative external factors such as the U.S.-China trade war and the tumbling sales of semiconductors, one of Korea's key export items. Unless it takes timely and appropriate measures, the Moon government cannot reverse the economic downturn. It cannot even meet its growth target of 2.6 percent to 2.7 percent for this year. Some skeptics even warn it will be hard for the economy to grow even 2 percent.
Against this backdrop, merely naming new economic aides is insufficient to inject fresh air into the flagging economy. A possible turnaround will not come from a mere change of people, but from a policy shift. President Moon and his economic team should first acknowledge their policy failures and figure out what the problems are. Then they must change their misguided policies if they really want to save the economy.