Leadership amid uncharted waters
When lawmaker Choi Kyung-hwan was named deputy prime minister in charge of economic affairs in July 2014, we asked him not to do three things: Don’t increase household debt, stretch public debt or monopolize appointments.
He is about to step down after 18 months in office having done exactly the opposite.
Household debt has swollen to over 1,200 trillion won ($999 billion), national debt exceeds 40 percent of the gross domestic product and the people he handpicked have made a mess of things.
The incoming deputy prime minister should’ve been as opposite to Choi as possible. We advised against anyone who has an interest in ruling power or a political affiliation - in other words, a politician. Our opinion was flatly rejected. The nominated candidate served as the chief secretary for President Park Geun-hye when she was president-elect and built up status among politicians while serving two terms.
Nominee Yoo Il-ho will face a confirmation hearing on Monday. Few foresee a veto against the heavyweight lawmaker with the main opposition party on the brink of breaking up.
An economist before becoming a politician, Yoo steps up to helm the national economy at a most challenging time. The economy is sailing into a storm that could be the worst since the late 1990s, when the country had to seek international bailout. He could end up taking the fall if the economy goes astray.
His outgoing predecessor has been grumbling that he earned a lifetime’s worth of scorn during his year and a half in the office, and it could be worse for Yoo. He is already being sneered at by the market for his inexperience - an economist who mostly served state think tanks and whose administrative experience consists an eight-month stunt as transportation minister.
But these experiences also mean he is versatile. He must use all the experience he has accrued in a career as a scholar, politician and cabinet minister to navigate these tumultuous waters.
There must be a good reason why the president wants to seat a politician in the top economic position despite criticism over the experiment with Choi. She has been frustrated with a contentious legislature that has delayed and bargained with economy-related bills. She has often blamed this for the worsening economy. With the political calendar full - the parliamentary election in April and presidential election the following year - the finance minister must be a skilled politician if he is to push ahead with much-needed reforms.
Yoo must be well-versed in macroeconomic theory. The external front is all in a fog of uncertainties from the U.S. rate hike campaign, the instability of the Chinese economy, crises in emerging economies and falling oil prices. The New Year started off rocky with Chinese shares losing 7 percent. Yoo must be confident to keep Korea Inc. afloat in uncharted waters. He must harness his own scholarly wisdom and utilize intelligence at home and abroad when needed to chart an inventive course.
Although not for long, Yoo has been on the cabinet - so he knows well that structural reform and restructuring are national priorities. Structural reforms are a long-term cure for the economy and restructuring works in the short-term. The Korean economy has a future only when both are utilized. Restructuring is never easy. He must make the most of his administrative experience to pursue the campaign. He must not be a populism-prone politician or weak-minded scholar to see the painful restructuring process through.
We hope to see an entirely new Yoo in next week’s confirmation hearing.
We do not want to hear half-baked commitments in addressing urgent affairs like the oversupply in housing once he takes office. Time is ticking fast for the economy and we need a well-prepared and skilled leader. He must have clear picture on the state of the economy in order to persuade both the people and politicians. If he’s not ready or equipped, it’s best he yield the position right now.
JoongAng Ilbo, Jan. 7, Page 30
The author is an editorial writer of the JoongAng Ilbo.
by Yi Jung-jae