Finance minister nominee vows to use AI to transform Korean economy

Koo Yun-cheol, the nominee for deputy prime minister and minister of economy and finance, enters Korea Deposit Insurance Corp. in central Seoul, June 30, a day after his nomination. The National Assembly will hold Koo's confirmation hearing, Thursday. Yonhap

Koo Yun-cheol, the nominee for deputy prime minister and minister of economy and finance, emphasized the need to capitalize on artificial intelligence (AI)-driven transformation to foster new industries, Tuesday, saying the “fate of Korea is at stake over AI and other advanced technologies.”

“AI is not only essential to the competitiveness of individual industries, but also a critical foundation for enhancing productivity across the economy in the long term,” Koo said in a written answer submitted to the National Assembly for his confirmation hearing scheduled Thursday.

“Therefore, it is necessary to build a robust AI industrial ecosystem through large-scale infrastructure investment, research and development (R&D) support, regulatory reform and other relevant efforts,” he added.

Formerly a vice finance minister during the 2017-22 Moon Jae-in administration, Koo said the finance ministry has been passive toward widening support for these industries, an approach that should change.

“With the global trade and industrial landscape changing rapidly, and major countries fiercely competing to foster high-tech industries such as AI, I believe the government must take on a more proactive role,” he said.

The nominee said that government policies for the labor market should change as well, in line with industrial structural transformation accelerated by the rise of AI.

He suggested fostering young AI talent and expanding customized employment services for middle-aged and older workers, as well as overhauling university education and vocational training.

Koo also highlighted a need to adopt the idea of universal basic income for job creation.

Aimed at offering periodic cash payments to all citizens, the idea of universal basic income has been floated for years as a solution to tackle widening inequality. However, it has been disputed for being too far-fetched and populist.

Koo suggested going beyond simple cash payments and proposed an improved model that could capitalize on AI.

“Introducing a basic income system can be crucial in order to guarantee the basic livelihood of the people and address socioeconomic inequality,” he said. “I will discuss whether to formalize it as a policy through consultations with relevant ministries and public discourse.”

With regard to budget and fiscal management, Koo said he will focus on “balancing out tax revenue and expenditures for long-term sustainability."

“The government will spend when necessary, and reduce spending when not," he added.

He went onto say his plan is expected to contribute to a virtuous cycle of economic growth that expands taxable income and improves fiscal sustainability.