Advice for a Deputy Prime MinisterWith the new government organization law taking effect from today, the finance and economy minister will be promoted to the position of deputy prime minister in charge of economic affairs, coordinating the Ministry of Finance and Economy, the Financial Supervisory Commission, the Ministry of Planning and Budget and the Blue House economic affairs team. The finance minister will become chairman of the economic policy coordination committee, which will take over responsibility for external economic policy coordination and financial and corporate restructuring from the Prime Minister''s Office and the Financial Supervisory Commission.
The country''s economy fell into serious disorder and confusion three years ago when the government abolished the economic deputy prime minister system. More recently, government ministries have displayed major differences on the issue of transactions between subsidiaries of the top four business conglomerates and also on the planned merger between Kookmin Bank and H&CB. Government policy needs to be as crystal clear and consistent as a traffic signal. But these recent inconsistencies have caused confusion in business circles and resulted in a loss of credibility for the government. For this reason, we acknowledge the need for an economic deputy prime minister despite concerns about "bigger government." However, a change in the area of policy-making and policy implementation is really more important than the reintroduction of the deputy prime minister for economic affairs.
First of all, we need to reconsider the role of the president. The running of the nation''s economy will not suddenly become smooth simply because the finance minister is promoted to the position of deputy prime minister. Even without the title of deputy prime minister, the finance minister can manage economic policy smoothly if the president believes in and supports him. The president should therefore hand over, not lend, as much of his authority in coordinating economic policy as possible. The president can then ask the deputy premier to take responsibility for his actions. The president must also remove any kind of external pressure so that the deputy prime minister can implement economic polices with confidence, free from political influence.
The deputy prime minister, of course, should realize the importance of his role. He should be able to say no. He should also be able to say, "The crisis is not over yet," even though the president and a number of politicians are tempted to announce the opposite. He needs to confront directly the president on his pledge that the government will complete corporate and financial restructuring by the end of February. While politicians demand short-term measures to boost the economy, he has to stand firm and make restructuring his priority.
The new deputy prime minister has to make it clear what the government should and should not do, and must then press ahead in a consistent fashion with those things that need to be done. He should not be satisfied with makeshift remedies such as the bailing out of troubled companies by the government or the underwriting of corporate bonds by the Korea Development Bank. He should come up with a strategy aimed at introducing good banking and top-notch corporations. The deputy premier should have faith in free market mechanisms and should try to limit the role of government to that of an impartial judge. Finally, he should put an end to government intervention to reduce overcapacity and excessive facility investment through so-called "big deals."
by Kim Dong-ki