South Korean Leader Moon Names Finance Minister, Key Aides

  • Taps long-time public official Kim as finance chief, deputy PM
  • Jang takes new policy role; Kang to be foreign minister

South Korean President Moon Jae-in turned to a long-time public official for his finance chief as he named key advisers and cabinet posts on Sunday.

The newly elected leader nominated Ajou University President Kim Dong-yeon as finance minister and deputy prime minister. Kim, a former vice finance minister and chief at the office for government policy coordination, is an economics expert who is well respected in political circles, academia and industry, the presidential office said in a statement.

Kim will take a leading role in Moon’s cabinet as it seeks to move the nation forward following the impeachment of former President Park Geun-hye. The finance chief will have to tackle challenges including rising household debt, youth unemployment and weak consumption. He also faces risks related to North Korea, U.S. trade protectionism and the prospect of further interest-rate increases by the Federal Reserve.

Steps that need to be taken in the short term include managing internal and external risks, creating jobs and boosting the economy through raising wages, Kim told reporters in Gwacheon, south of Seoul. “I will listen to the people’s voices and actively communicate with them to implement economic policies,” he said.

China Swap

Kim also noted the need to implement extra budget and expansionary fiscal polices to resolve issues including low growth and youth unemployment. Kim added he will work to extend the currency swap deal with China through consulting with both economic and diplomatic authorities.

Moon appointed Korea University professor Jang Ha-sung to a new position of chief of staff for policy. Jang, who has done extensive research on inequality and corporate governance, is expected to work on policies to reform family-run conglomerates known as chaebol, according to the statement.

The president named Kang Kyung-wha as foreign minister. She is a policy adviser at the United Nations, the Blue House said in the statement. If appointed, Kang will be the first female chief in the ministry’s almost 70-year history, as Moon seeks to fulfill a campaign pledge to seek gender equality in his cabinet appointments.

For the role of national security adviser, Moon nominated former Ambassador to Geneva Chung Eui-yong. Chung will use his diplomatic skills to tackle issues including North Korea’s nuclear development, the U.S. missile shield recently deployed on Korean soil, and free-trade agreements, Moon said at a news briefing.

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Moon said that Kim, who grew up in the country’s poorest area and rose through the ranks of the country’s senior economic posts, is a person who can sympathize with people’s woes. 

South Korea’s household debt jumped almost 12 percent to 1,344 trillion won ($1.2 trillion) last year, while the jobless rate for people aged 15 to 29 exceeded 11 percent in April. To boost the economy, Moon has pledged to adopt a 10 trillion-won extra budget -- a plan that must be upheld by the national fiscal law and approved by parliament.

Kim wrote in a local newspaper column last month that a solution is needed to cut the high rate of youth joblessness, such as by making the wage system more flexible and reducing regulations that limit growth of new industries.

Previous finance ministers have occasionally placed implicit pressure on the central bank to lower interest rates and boost the economy. Yet, with the U.S. Fed tightening its policy and Korean household debt rising, most economists don’t expect the next finance chief to exert such pressure. 

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