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(News Focus) S. Korea seeks economic stability under incumbent finance minister

All Headlines 11:25 December 13, 2016

By Lee Chi-dong

SEOUL, Dec. 13 (Yonhap) -- Acting President Hwang Kyo-ahn's decision to retain Yoo Il-ho as South Korea's finance minister is viewed as an intention to maintain policy continuity and stability in the face of tumultuous political and economic situations.

It effectively puts an end to more than a month of disputes over who should lead the nation's economic team.

In early November, President Park Geun-hyue, embroiled in a harsh political crisis, announced the sacking of Yoo, who doubles as deputy prime minister for economy.

Acting President Hwang Kyo-ahn (L), Finance Minister Yoo Il-ho (R) and Financial Services Commission Chairman Yim Jong-yong in this undated file photo. (Yonhap)

She named Yim Jong-yong, chairman of the Financial Services Commission (FSC), as his replacement.

Amid a row over Park's presidential fate, however, the confirmation hearing and other procedures have been stalled. Opposition lawmakers claimed that Park should first step down.

Park's presidency is now up to the Constitutional Court, as the National Assembly voted to impeach her last Friday. It's widely expected to take several months for the court to make the ruling, with concern growing about a possible leadership vacuum especially on the economic front.

Apparently in consideration of such worries, the acting president was quick to clarify the role Yoo and Yim. He ordered Yoo to stay in charge of the overall economic policy and Yim to keep spearheading financial reform and regulatory work.

It marked Hwang's first major decision on domestic affairs as acting president.

Acting President Hwang Kyo-ahn (L) walks with Finance Minister Yoo Il-ho (R) at the Seoul Government Complex on Dec. 13, 2016, to attend the Cabinet meeting. (Yonhap)

"It's fortunate that there have been swift decisions from the impeachment against President Park to the launch of Acting President Hwang's leadership and retaining Deputy Prime Minister Yoo in his post," Baek Woong-ki, a professor at Sangmyung University, said. "(Hwang) seems to have placed more emphasis on the continuity (of economic policy)."

FSC officials also welcomed Hwang's choice, citing the possibility of an early presidential election.

Political pundits doubt Park will be able to complete her five-year tenure originally scheduled to end in early 2018. It means South Korea may elect its new president next spring or summer.

(News Focus) S. Korea seeks economic stability under incumbent finance minister - 3

"For now, I think, it's better to let the existing economic team put the finishing touches on work in place," an FSC official said, requesting anonymity.

It remains unclear how smoothly Yoo, formerly a scholar and lawmaker known for a relatively "low-profile" leadership, will lead the economic team amid a host of uncertainties and the opposition block's increased influence on state affairs.

(News Focus) S. Korea seeks economic stability under incumbent finance minister - 4

On Monday, the first business day after the impeachment vote, the main opposition Democratic Party failed to decide on the finance minister issue due to internal disagreement.

The party argues Yoo's team is to blame for some of South Korea's economic troubles, disenchanted with Hwang's "unilateral" decision. But it appears to have no specific alternative.

In a reversal of its negative stance, the party said Tuesday it would accept Hwang's decision.

"Based on a conclusion that there is a possibility that a change in the Yoo Il-ho and Yim Jong-yong system will send the wrong signal to the economy, we have decided to maintain the current situation, waiting and see (how it goes)," Rep. Woo Sang-ho, the party's floor leader," told reporters.

Yim Jong-yong (R), chairman of the Financial Services Commission, visits the Financial Security Institute in Yongin, Gyeonggi Province, on Dec. 12, 2016. (Yonhap)

Pundits advised the finance minister and the FSC chief not to be distracted by the ongoing political controversy.

In particular, it is urgent to finalize the nation's economic policy direction for 2017, they pointed out.

"As the leader of the economic team, he needs to demonstrate that South Korea's economy has the capability to revive itself and attain sustainable growth," Baek said.

Yoon Chang-hyun, a professor at the University of Seoul, stressed the importance of redoubling efforts to curb deflation.

"Since the economic condition is expected to be very bad in the first half of next year, it's necessary to front-load budgetary spending," he said.

Reflecting such concerns, Yoo asked government ministries and agencies at a Cabinet meeting Tuesday to swiftly implement budget expenditures with the beginning of the new year in the face of economic uncertainties ahead.

"The government should thoroughly prepare for fiscal spending in 2017 in order to preemptively deal with uncertainties at home and abroad," Yoo said.


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