Recovery likely key goal for new economy chief

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Recovery likely key goal for new economy chief

The nomination of current Korea Development Institute head Hyun Oh-seok as government economic chief yesterday seems to hint that the incoming Park Geun-hye administration is putting more weight on immediate economic recovery than other affairs such as economic democratization.

At a press conference after his nomination was announced, the newly appointed deputy prime minister on economics and finance minister said digging the economy out of the drawn-out recession is one of his most urgent tasks.

“Inevitably, we should mull over both measures to achieve short-term economic recovery and long-term growth potential,” Hyun said. “At the moment, I can’t mention which one deserves more priority.”

Hyun has been an adviser to President Lee Myung-bak in his growth policies, dubbed “MBnomics,” for the past five years.

President-elect Park, on the other hand, has been putting more of an emphasis on the need for the so-called economic democratization, or fairness in business and society.

Now, there’s a high chance the new government will pursue an aggressive fiscal policy as the state-run think tank Hyun heads has been calling for the earmarking of a supplementary budget to boost the economy.

“I will pursue balanced growth through a virtuous cycle of growth and welfare to make a thriving middle class,” Hyun said.

The incoming Park administration’s economic tasks include fair growth for both large and small businesses under the banner of economic democratization, expansion of welfare benefits and raising the country’s employment rate to 70 percent.

As finance minister, one of Hyun’s key tasks will be figuring out how to finance Park’s welfare plan, which has an estimated price tag of over 130 trillion won ($121 billion).

Hyun declined to comment on the economic democratization debate, but in recent interviews with the local press he has said he agrees with Park on the need for fair competition between large and small firms.

The nominee made it clear he will do his best to kick-start the economy using the power of all government branches.

“As deputy prime minister, I will be coordinating the interests of each government branch efficiently [to deal with economic issues],” he said.

Hyun, 62, is from Cheongju, North Chungcheong. He has served with the Bank of Korea, the Ministry of Strategy and Finance, the International Bank for Reconstruction and Development, and the Korea International Trade Association (KITA). He was managing director of the economic policy bureau at the Finance Ministry in 1998-99, when the Korean economy was hit by the Asian financial crisis.

From 2002 through 2008, he led the Institute for International Trade at KITA as a strong proponent of free trade agreements with the United States and other advanced countries. He has been serving as KDI chief since March 2009.

“I feel a grave responsibility as the nominee for chief of the country’s economy at a time when the global economy is mired in a difficult situation,” Hyun said.

Hyun’s nomination comes as Korea’s economy hit a three-year low in growth last year, at 2 percent.

Some analysts say that Hyun’s experience at the KDI could make him the right person for the job.

But critics say his recent work makes them doubt his abilities. During Hyun’s time at the helm of the KDI, it has lost its reputation as the country’s top economic institute.

The think tank has come under fire for its inaccurate economic forecasts in recent years. In early 2012, the institute projected a 3.6 percent growth, far higher than other private think tanks. It revised the figure down to 3.4 percent in September and once again to 3 percent in November.

The institute was ranked on 58th in terms of competitiveness among global economic think tanks in a survey by a University of Pennsylvania research center last year.

By Song Su-hyun []
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