Acceleration of Economic Reform
On May 21, South Korean President Moon Jae-in nominated Ajou University president Kim Dong-yeon as Deputy Prime Minister for Economic Affairs and Minister of Strategy & Finance and Korea University professor Jang Ha-sung as Presidential Senior Advisor for Policy Affairs. This nomination is regarded as being innovative in that both of them have no personal connection with the President.
The two are expected to lead the realization of the President’s economic policy focusing on income-led growth led by not chaebols but small and medium-sized enterprises (SMEs). Their division of labor is likely to take the form of the senior advisor, who have conducted studies on social and economic inequality, providing theoretical support and the deputy prime minister, who is an experienced government official, turning it into specific policy measures.
Professor Jang Ha-sung is a renowned left-wing scholar who has raised his voice against the traditional corporate structure and the concentration of economic power. He participated in the foundation of the People’s Solidarity for Participatory Democracy in 1994 and set up a committee in it in 1996 for a social movement for economic democracy. Since 2010, he has worked on a better corporate governance structure as a member of the Center for Good Corporate Governance. In addition, he has led campaigns for minority shareholders’ rights and urged conglomerates to improve their governance structure since the late 1990s with Hansung University professor Kim Sang-jo, who has been nominated as chairman of the Korea Fair Trade Commission (KFTC).
Ajou University president Kim Dong-yeon, in the meantime, started his public career in March 1983 at the former Economic Planning Board in charge of budgetary affairs. Then, he mainly worked as an official in charge of the same affairs at the Ministry of Planning & Budget. After the ministry was combined with the Ministry of Strategy & Finance in 2008, he served as the head of the Budget Office of the Ministry of Strategy & Finance in 2011 and the vice minister of the same ministry in 2012.
Some people are saying that his nomination as Minister of Strategy & Finance was rather unexpected in view of his career. Until recently, that post has been led by officials and scholars experienced in not budget planning and execution but economic policy, finance and tax in most cases. However, many in the ministry are currently regarding him as one of the most qualified as he has done various types of work, ranging from those related to budget to finance and planning, and served as the head of the Office for Government Policy Coordination in the previous administration as well. Moreover, they are expecting that long-term policy and vision will be prepared soon in that he is one of those who drafted the Vision 2030 Report between 2003 and 2007 in the Roh Moo-hyun government.
The direction of the Moon Jae-in administration’s economic policy can be estimated based on their nomination and the nomination of Sogang University Professor Kim Kwang-doo as vice chairman of the National Economic Advisory Council and Kim Sang-jo as chairman of the KFTC. The team’s top priority is likely to be chaebol reform in view of the four nominees’ careers. Still, professor Jang Ha-sung mentioned immediately after his nomination that the team will concentrate on the growth of SMEs and small businesses, rather than coercive chaebol reform, because the team’s ultimate goal is the realization of a balanced business ecosystem for co-prosperity.