Choi Kyung-hwan, a third-term lawmaker from the ruling Saenuri Party, was nominated on Friday as South Korea’s new deputy prime minister and finance minister, a key post for the nation’s economic policy direction.
The appointment of Choi, the floor leader of the ruling party who is considered a close aide of President Park Geun-hye, is seen as signaling a continuation in the administration’s economic reform efforts.
Choi, 59, who served as minister of knowledge economy under former President Lee Myung-bak from 2009-2011, is a bureaucrat-turned politician. He began his career as a public servant in 1978, and entered politics in 2004.
Choi will be tasked with pushing through Park’s economic reform scheme, as well as maintaining the country’s growth momentum despite lingering global economic uncertainties, such as China’s slowing growth and the end of the U.S. Federal Reserve’s economic stimulus.
But his crucial test will be to curb weakening domestic demand in the wake of the Sewol ferry disaster. Consumption-related economic indicators show a decelerating contraction after the April 16 deadly sinking that claimed more than 300 lives.
“I feel a grave responsibility following the deputy prime minister nomination as the unexpected Sewol accident during a trend of recovery created difficulties for people’s economic interests,” Choi told reporters following the nomination.
Market watchers expect Choi, for now, to focus on pushing deregulation to bolster corporate investment and job creation and to revitalize the domestic market.
Some predict he may opt for more aggressive stimulus measures, such as additional government spending since economists have warned that the country’s economic growth in 2014 could be lower than its initial prediction.
In addition to weakening domestic consumption, Choi will be under growing pressure as the local currency has continued to strengthen.
The won has strengthened nearly 12 percent over the past year against the greenback, the best performance among major currencies.
Some are now calling for the Finance Ministry to take immediate action since the appreciation of the won is already raising worries among exporters about weakening price competitiveness.
To curb the won’s ascent, Choi may pressure the Bank of Korea to lower its benchmark interest rate, which it kept unchanged at 2.50 percent for 13 months, market strategists say.
This, however, could see strong resistance from BOK Gov. Lee Ju-yeol, who insisted changing interest rates in response to the moves in the won may have “unexpected side effects.”
His other long-term tasks will include tackling mounting debt problems and stifled household income growth.
By Oh Kyu-wook (firstname.lastname@example.org)
Science, ICT and future planning
Choi Yang-hee, a professor at Seoul National University, was tapped as the head of the Ministry of Science, ICT and Future Planning on Friday.
The 58-year-old minister-nominee emphasized the importance of converging different industries and technologies, the key for bringing about the creative economy, a signature policy of the Park Geun-hye administration that calls for pushing the economy forward by creating new business opportunities.
After becoming a full-time professor of computer engineering at Seoul National University in 2000, Choi headed numerous IT-related institutions, such as the Korean Institute of Information Scientists and Engineers.
Before joining the university, he worked for the state-run Electronics and Telecommunications Research Institute, spearheading the research project on information communications standardization.
Last year, Choi was named the head of the Samsung Science and Technology Foundation, a nonprofit organization under Samsung Group, which mainly focuses on research in fundamental science.
While the ministry has launched various projects to spearhead the creative economy over the past year, policy watchers say Choi’s main task would be solidifying the identity of the strategy.
Born in Gangneung, Gangwon Province, on the country’s east coast, Choi majored in engineering at Seoul National University, and went on to earn a doctorate at France-based ENST.
By Shin Ji-hye (email@example.com)