A candidate for the Minister of Economy who could not call himself an “economic control tower”

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“Who is the economic control tower in the current government?”

As usual, my first thought was ‘Deputy Prime Minister for Economy and Finance’. People’s Power Party lawmaker Joo Ho-young asked the question during the confirmation hearing for Deputy Prime Minister Choi Sang-mok and Minister of Strategy and Finance on December 19. He asked: “Will the Deputy Prime Minister take over the management ‘Or will it be the Chief Economic Adviser? Will the Political Director take over that role?’ With concern, he raised the issue that the creation of the position of director of policy at the ministerial level within the presidential office, in addition to the position of the president’s chief secretary for economic affairs, may pose a risk that the so-called deputy prime minister does not serve as a central coordinating person and may be sidelined.

The responsibility assigned to candidate Choi lies in economic leadership. The confirmation hearing request for candidate Choi submitted by the president states: “Amid the ongoing global complex crisis, the role of the economic steering center to ensure stable economic management is more important than ever. The candidate has the ability to contribute to Korea’s progress in a globally key country.”

The attempt to present this as merely an anecdote reflecting Choi’s humility is troubling, especially in light of recent developments in the finalization of economic policies. Initially, the government expressed reluctance to raise the threshold for taxing domestic stock trading profits to 5 billion won per share. Despite persistent reports of a possible release from the presidential office, Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho firmly stated on Dec. 12, “We are not considering it in detail.” But just nine days later, capital gains tax standards for major shareholders were unexpectedly relaxed.

Reports suggest that the president’s office was the driving force behind the decision. Millennial and Gen Z stewards in the president’s office reportedly made a strong case for eliminating the stock transfer tax, stressing that it was President Yoon Suk Yeol’s commitment and highlighting the challenges facing individual investors amid market uncertainty. The presidential office is said to have accepted these arguments and subsequently acted after consideration. In this case, economic principles seemed to be set aside and political judgment followed to strengthen the stock market. Previously, individuals who held shares worth more than 1 billion won were categorized as “major shareholders” and subject to taxation. This tax policy led to repeated declines in stock prices as individual investors sold large amounts of stock at the end of the year to avoid tax liability.

Choi was serving as the president’s chief economic adviser until a month ago and was hailed as a “brilliant bureaucrat.” Given his previous role, he likely understands the dynamics between the office of the president and the government. Worryingly, however, he appears to have sought to take the lead in shaping economic policy. This raises concerns that he may be seen as a “follower” rather than an authoritative figure leading and coordinating economic strategy. Ironically, Choi had earlier in 2016 taken the initiative as Vice Minister of Strategy and Finance to lead the lowering of the stock transfer tax standard for major shareholders from 2.5 billion won (the KOSPI standard) to 1.5 billion won. His actions after taking office will likely confirm whether he emerges as an economic leader or follower.

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