A new economic team

The Lee Myung-bak administration launched a new economic locomotive on Monday with the simultaneous replacement of the minister of strategy and finance, the chairman of the Financial Services Commission and the senior presidential secretary for economic policy.

The shake-up of top economic policy makers was belated but necessary. The new picks are qualified and experienced. We have voiced the necessity of a reshuffle several times.

The changes are necessary not because Lee’s first economic team has received blame from the public for their slow response to the economic crisis and for poor policy management. They are necessary because the past officials were not the kind of thinkers Korea needs in changed economic circumstances.

Lee’s foremost priority when his administration took office last February was growth. But their growth-driven policies were ineffective as the financial crisis, exacerbated by high oil prices, began to batter the global economy.

Against this backdrop, the economic team, composed of growth experts, was limited in tackling the emergency situation. In order to deal with the unprecedented crisis, a risk management team, equipped with leadership and appropriate experience, is needed.

The policies of the new top economic squad thus should be geared toward overcoming the current economic crisis. They need to tackle the problem on two fronts - finance and the real economy. Countermeasures must encompass both.

Specifically, the uncertainty in the finance and foreign exchange markets should be cleared up as soon as possible. On the real economy, potential economic growth and job market growth should be preserved by all means.

To that end, the new leaders should quickly detect problems and show decisiveness to mobilize all the necessary policy tools. Meanwhile, a leadership that coordinates different economic organizations will be also needed.

Another thing that the new top economic hands need is restoring credibility. No matter how good the government’s new policies are, they cannot become effective without the trust of the public and the market. The previous economic task force failed in this regard.

To earn public trust, they need to stay consistent in their policies as well as open communication with the public.

If the government fails to earn this trust, the policies will fail.