No-comment Hong

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No-comment Hong

 Cho Min-geun
The author is deputy director of business news at the JoongAng Ilbo.

During a press conference in Rome at the G20 meeting over the weekend, Deputy Prime Minister for Economic Affairs Hong Nam-ki, who also serves as finance minister, avoided answering questions about a third Covid-19 relief grant being pitched by Lee Jae-myung, the presidential candidate of the ruling Democratic Party (DP) and former Gyeonggi Governor.
“The issue is not appropriate to be addressed here in Rome,” said Hong tersely.
Oblivious to the worries of policymakers, Lee went a step further. He laid out the specific sum: 500,000 won ($424) for every citizen for the next relief grant. An official in his election camp argued the handout should be reflected in next year’s budgetary outline under review at the legislature. The official said Lee’s campaign plans to push through the proposal even if it must “break” the stumbling block (Hong). The deputy prime minister won’t be able to evade the issue for long when he returns home later this week.
Only a month has passed since the Moon Jae-in administration doled out its second relief grants after much dispute. Compensation for damages for small merchants who suffered lengthy business restrictions for Covid-19 also have just started to be paid. Even the DP would feel uneasy about suggesting another handout. Lee argues for an additional relief grant, claiming Korea’s checks were smaller than the stimuli checks handed out in the United States and Japan. But it was the Moon administration and ruling party that boasted of smaller losses and a faster recovery from the pandemic than the two economic powers.
Then, why is Lee pushing for such a controversial handout? The political community suspects it as a strategy to turn attention from the Daejang-dong development scandal, where Lee’s liability is being raised by the opposition camp since he approved the suspicious development project despite concerns about favoritism. Bureaucrats smell another motive. A senior official from an economy-related ministry speculated that Lee wished to gain the upper hand in economic policy as a presidential candidate of the ruling party.
Since Lee could not dare to challenge the Blue House, he has found an easier target — the finance ministry, which controls fiscal spending. Fiscal policymakers just can’t agree to the idea of basic income, the centerpiece of Lee’s audacious campaign platform. As Gyeonggi governor, Lee has picked on the finance ministry.
“This nation does not belong to the finance ministry,” he fumed, and went on with distributing additional relief grants to every resident of his jurisdiction out of the local government’s coffers when the central government decided to hand out relief grants to all but the best-paid 12 percent of the population. Lee’s municipal government had clashed with the central government over issue of a regional currency and subsidizing commuting buses between Gyeonggi Province and inner Seoul. Lee accused the ministry of being “overbearingly arrogant and forcible.” He even attacked Hong for being “naïve to economic realities.”
Lee went so far as suggesting a dismantling of the finance ministry. During a forum on Oct. 27, he argued for watering down the powers of prosecution, the Board of Audit and Inspection, and the Ministry of Finance. He proposed stripping the budgeting power from the ministry and place it under the prime minister’s office. Lee has touched the most sensitive concern of bureaucrats involving power and job.
It is no wonder that Hong did not want to answer questions about Lee. He chose to keep silent when he should have spoken up. The finance ministry under Hong lost credibility by giving into political pressure. The taking of government debt to historic highs is not the only problem. If spending is necessary, it should be administered. But there had been no principle in spending. The ministry could not push with its argument on selective relief grants and had to come up with a strange threshold of 88 percent. Yet the ministry claims it has defended the “selective” guideline.
Economic conditions are still perilous at home and abroad during the final stage of the Moon administration. Hong and the finance ministry must not waver further from political pressure. The deputy prime minister must prove why he is the head of the government’s economic team.
He must stake his office instead of keeping silence and stand tough on behalf of government officials to defend against populist winds from political circles. Hong, already the longest-serving finance minister, has nothing to lose.
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