Rep. Park Young-sun of the ruling Democratic Party of Korea said Deputy Prime Minister and Minister of Economy and Finance nominee Hong Nam-ki should review the economic policies of his predecessor and the previous administration if he is appointed.
Ruling party lawmakers reportedly said at Hong’s confirmation hearing Tuesday that the economic team led by Deputy Prime Minister and Minister of Economy and Finance Kim Dong-yeon had failed substantially, though they also blamed the current economic difficulties on the administration of former President Park Geun-hye.
In other words, they targeted not only the previous government with their criticism, but also Kim.
More than a year and a half has passed since the inauguration of President Moon Jae-in.
Still, the ruling party is blaming the previous administration -- and now, even a minister who is part of the Moon administration.
With job seekers facing an “employment cliff” and ever-worsening levels of income inequality, ruling party lawmakers are shamelessly pointing the finger.
Kim was appointed by Moon, and Hong is Moon’s nominee.
Kim has pushed ahead faithfully with Moon’s economic policies. And the result is the current economic situation.
The South Korean economy has worsened, largely because the presidential office has held tenaciously to an income-led growth policy. The ruling party must not direct its criticism at Kim.
The employment crisis is a problem caused by the present administration, not by the past administration.
Rep. Park also said Hong must plead with the nation to share in the inevitable pains that will follow the restructuring of the economy.
Who suffers the most from the income-driven growth policy? Low-income earners, small-business owners and young job seekers were hit hard by the sharp increase in the minimum wage, the shorter maximum workweek and the push to convert irregular workers into regular staff members. Korea’s gross national income decreased 0.2 percent year-over-year in the third quarter. The unemployment rate hit a 13-year high of 3.5 percent in October.
In pursuing a fair economy, the Moon administration has pressured companies while at the same time accepting most of the demands of labor-rights activists. One of the consequences is the 7.4 percent year-on-year drop in facility investment in the third quarter.
If pro-labor, anti-corporate restructuring continues at the current pace, the prospects of an economic recovery will recede into the distance and the resulting pains will increase.
At his confirmation hearing, Hong forecast positive effects from the income-led growth policy in the second half of next year.
But those effects should have been felt by now in accordance with the predictions of Jang Ha-sung, the former presidential chief of staff for policy whom Moon sacked when he nominated Hong as deputy prime minister.
By the latter half of next year, Moon will be in the third year of his presidency. He may be a lame duck by then if his approval rating continues to fall.
He pushed the income-led growth policy as strongly as he pushed his signature anticorruption drive, targeting former administrations.
Unfortunately, however, even if Hong’s prediction is accurate, the people will not taste the fruits of the policy for more than two years after Moon’s inauguration.
Besides, will the policy really produce the desired effects in the second half of next year? We’ll see when the time comes, but it does not look promising, because the administration has taken the wrong direction, yet Hong remains intent on picking up where Kim left off.
The Moon administration has failed repeatedly in its management of the economy. Growth slowed. Investment, production and consumption dropped altogether. The job market went from bad to worse. Income bipolarization intensified.
Not all these problems can be laid at the feet of the government. But so far, statistics indicate that its wrongheaded policy has accelerated the economy’s downward slide.
According to a recent opinion poll by a bipartisan forum on economy and public finance, 63 percent of respondents said the economy had worsened over the past year and 74.5 percent said the income-led growth policy must be changed or relaxed. In a word, the Moon administration has flunked the test.
If nothing changes in terms of input, how can the output change?
If Cheong Wa Dae is determined to maintain its experimental policy despite it having been proven misguided, why is it replacing its deputy prime minister in charge of economic matters?
The new deputy prime minister must not become another scapegoat for policy failures.