A drive to win
*The author is the economic news editor of the JoongAng Ilbo.
Yoon Jong-won, the new senior secretary for economic affairs, is an orthodox pitcher who throws a fast ball, rather than a breaking ball, if the job is compared to a baseball game. He is also known as a wonderful tennis player. Anyone who played a match against him is often surprised at his second service. Normally, a player chooses to make a safe second serve after a strong first one fails, but Yoon is different. He prefers a powerful second serve. He is famous for his straightforward style, rather than trying to find alternative ways, as an economic bureaucrat.
Yoon is one of the best candidates for the job President Moon Jae-in could have chosen from a relatively small pool of economic talents. One reason why is that he served as a standing director of the International Monetary Fund and head of South Korea’s mission to the Organization for Economic Cooperation and Development over the latest five years. He witnessed the economic ups and downs of the IMF and OECD members. He must have learned what leaderships and policies could revive economies and what societies succeeded in reform. Yoon should use all his experiences and insights to save Korea’s economy from its current crisis.
Another important point is the recommendations by the IMF and OECD for the Korean economy. Those two institutions have long pointed to the rigid labor market as the Korean economy’s persistent problem and demanded more flexibility in the market. Since the 1997 foreign exchange crisis, the labor sector was the only area where reform efforts fell short. Without accomplishing labor reform, improving productivity is difficult. The relentless pursuit of self-interest by labor unions of some conglomerates and public companies have long hindered the Korean economy. While serving in key posts at the IMF and OECD, Yoon must have studied their recommendations and struggled to find resolutions.
Yoon must have observed the dynamic reform process by French President Emmanuel Macron, since the Korean mission at the OECD is located in Paris. Macron and Moon share various commonalities. They won overwhelming election victories with the public’s strong desire for change. They were both inaugurated in May 2017.
They both completed their first year in office, but their situations are quite different. Moon’s approval rating still hovers around 70 percent, but Macron’s rating went down to the 40 percent level. But Macron’s efforts to revive the economy seem more successful. Most of all, there is a clear sign that the unemployment issue, which has been an obstacle for the French economy, is being improved. Although the unemployment rate is still high at 9.19 percent during the first quarter, it has been steadily lowered since last year. It is actually the lowest since 2009. Macron’s leadership, which pushed forward various labor reforms and a corporate tax cut, created a business-friendly environment as a top priority. As taxes were cut and the labor market became more flexible, companies that left France are returning and jobs are being created.
Recently, Macron pushed through sweeping reforms in France’s state railway system, despite a strike by the militant rail workers’ union. Although the railway union had a long history of winning against Presidents Jacques Chirac and Nicolas Sarkozy, their latest three-month strike failed. As the Macron administration established a firm principle and did not budge, the French people put up with the disrupted services and supported the government. As a result, the life-time employment contract for new recruits and other excessive welfare benefits will end. It was a moment of victory for Macron, who weathered a fall in his approval rating to resolve an everlasting problem of France.
I hope new secretary Yoon shares the success story of Macron’s reforms with Moon. Although the labor community offered strong support for Moon’s election, Yoon must persuade the president that he must not delay labor reform because of his liabilities. Yoon must make Moon see that without labor reform, restarting the growth engine for the economy is impossible.
Yoon’s strong desire to win — whether it is a project or a sports game — is well known in officialdom. He must use that desire to become a successful senior secretary who reinvigorates the Korean economy.