S.Korea & # 39; s Moon shakes up the economy team and swears to keep policy
01:43 EST, November 9, 2018
01:43 EST, November 9, 2018
By Choonsik Yoo
Seoul, Nov. 9 (Reuters) – South Korean president Moon Jae-in has replaced his two main economic policy makers with current members of the government, his office announced Friday that the changes have been made to the efforts for a more equitable economy to strengthen.
Moon has replaced Presidential policy officer Jang Ha-sung and Finance Minister Kim Dong-yeon, the two top policy makers responsible for Asia's fourth-largest economy, the presidential office said.
Presidential social policy assistant Kim Soo-hyun will succeed Jang and veteran bureaucrat Hong Nam-ki, currently head of the government policy coordination office, will be the new finance minister, the presidential office said.
"Today's appointments were meant to promote the efforts to build an inclusive nation, with everyone better off together," said Moon's head spokesman Yoon Young-chan a news conference on television.
The outgoing finance minister, who had served since June last year, had repeatedly called into conflict with Jang by calling for an adjustment of the president's "income-driven growth" strategy.
Critics say that Moon's distinctive policy, particularly large minimum wage increases and shorter working weeks, has been counter-productive, with lower incomes – the targeted beneficiaries – who feel the most pain because employers reduce people's take-up.
It was a larger realignment than expected, but the appointment of their successors from the government meant that President Moon would pursue the existing economic policy, which economists claimed to be damaging to growth.
Markets reacted lukewarmly to what appeared to be a cosmetic and largely political event, with stocks and currencies both under pressure and an aggressive US central bank deterring investors from holding riskier assets.
"There is no sign of any policy change, and instead it means the president wants the government to do the same," said Oh Suk-tae, Korean economist at Societe Generale.
The upcoming president of the presidential policy supported hard regulatory measures aimed at reducing house prices, which according to many analysts were against market principles.
The incoming Minister of Finance has served at various ministries, such as the Ministry of Finance and the presidential office. He still has to be screened by parliament, but approval is not mandatory.
A survey by Gallup Korea, published on Friday, showed that the approval rating for Moon had dropped to 54 percent for four weeks, far down from a height of 84 percent just after he took office in May last year after depositing and disposing of his predecessor.
The minimum wages in South Korea are expected to rise by nearly 30 percent in two years and the working week has been cut by almost a quarter for large companies, but the first results were a dip in labor participation and lower incomes.
The economy saw its growth remain stable in the quarter of July-September compared to the previous quarter, by 0.6 percent, but market expectations are disappointing because construction spending fell the most in two decades.
Private consumption sustained increased welfare support, but a sharp reduction in infrastructure spending and strong controls on real estate transactions distorted prospects at a time when global demand for South Korean exports is cooling. (Additional reporting by Hayoung Choi; Editor by Simon Cameron-Moore)
Share or comment on this article:
Sorry, we currently do not accept comments on this article.