Korea's economy will run like a business for growth: finance minister nominee
South Korea's finance minister nominee, Koo Yoon-cheol, vowed Sunday to manage the national economy with the rigor of a private company, focusing on return on investment and making government spending more productive.
'South Korea must pursue real growth, and that requires a fundamental overhaul,' Koo said during a press briefing shortly after his nomination was announced. 'We must run the economy like 'Corporation Korea,' where the people are our shareholders.'
Koo, tapped as the first finance minister under President Lee Jae Myung, will be responsible for steering the new administration's economic policy. His comments aligned closely with Lee's top priority of improving public livelihoods, a message the president has underscored since taking office.
'I feel a deep sense of responsibility in being nominated at a time when the Korean economy faces serious challenges,' Koo said. 'But responsibility alone isn't enough — we must act. The most urgent task is stabilizing prices and easing the burden on ordinary citizens.'
Koo also pledged to revitalize regional economies outside the capital area and address seasonal safety concerns as Korea approaches the peak of summer. Externally, he pointed to rising risks from US tariff negotiations, the war in Ukraine, and tensions in the Middle East.
'I will respond actively and step by step to the challenges confronting our economy,' he said.
A veteran of budget policy, Koo likened managing the national economy to running a business — where every investment must be justified by returns.
'It all begins with cost-benefit thinking,' he said. 'A company that makes bad investments eventually fails. The same applies to a country. Korea must ensure that every unit of spending delivers value — whether by cutting costs, raising revenue, or finding new engines of growth.'
Koo reaffirmed the Lee administration's expansionary fiscal stance, but with a focus on measurable outcomes.
'We must approach fiscal policy from a performance-based perspective," he said. "If more spending leads to growth, we spend more. If it doesn't, we cut back. In the short term, we operate flexibly. But in the long term, what matters is spending productively — even if that means spending more — to ensure sustainable growth.'
He also stressed the need for systemic reform and future-oriented investments.
'We'll invest strategically in emerging industries like AI to build new growth engines, ensuring all citizens share in the opportunities and rewards of economic expansion and creating a virtuous circle between national progress and public well-being," said Koo.
A visiting professor of economics at Seoul National University, the minister nominee has long argued that AI is Korea's next great economic engine. In April, he reportedly said, 'Korea's golden time lies in the next five years — our future depends on AI.'
The seasoned bureaucrat returns to the Finance Ministry after five years, having last served as second vice finance minister under President Moon Jae-in, overseeing budget and fiscal policy until May 2020. He previously held several high-level posts at the ministry, including director general for budget planning and for social spending, and was widely regarded as the architect of Moon's 'people-centered economy.'
He also held senior positions in the presidential office under President Roh Moo-hyun, including director of government affairs and secretary for personnel. From May 2020 to June 2022, he led the office for government policy coordination.
In announcing his nomination, the presidential office described Koo as 'someone who has long explored how to drive innovation in Korea,' and 'ideally positioned to chart a path for national growth, backed by deep expertise in finance and policy.'
Koo steps into the role with considerable responsibility, following a nearly two-month vacancy after the sudden resignation of former finance minister Choi Sang-mok.
Although the finance minister typically also serves as deputy prime minister for the economy, the presidential office did not clarify whether Koo would take on that role — fueling speculation of a broader structural shake-up.
President Lee has previously proposed splitting the Finance Ministry into two branches, one for budgeting and another for fiscal policy, to curb its influence and bring budgetary oversight closer to the presidential office.
He will be formally appointed following a parliamentary confirmation hearing. Once confirmed, Koo will immediately face a packed agenda — setting the new administration's economic direction, preparing next year's budget, and responding to trade risks and domestic headwinds.
'Having risen from one of the world's poorest countries to the brink of developed-nation status, Korea has already experienced what it means to lead globally — and I believe we can do it again, and must,' Koo said.
'The country must achieve real growth to ensure people's happiness. I will devote myself to making that happen — and to making sure the benefits of that growth return to the people and improve their lives.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
4 hours ago
- Korea Herald
Consumer prices rise 2.2% in June on higher industrial goods, service costs
South Korea's consumer prices grew at the 2 percent level in June, mainly driven by higher costs of industrial goods, notably processed food products, government data showed Wednesday. Consumer prices, a key gauge of inflation, increased 2.2 percent from a year earlier last month, according to the data from Statistics Korea. Inflation had remained above the Bank of Korea's 2 percent target for four consecutive months through April before slightly easing to 1.9 percent in May. The June figure also marked the steepest on-year increase since January, when inflation also stood at 2.2 percent. The statistics agency attributed the June increase to the recent depreciation of the local currency, which led to higher import prices for industrial goods A steady rise in service prices also contributed to overall inflationary pressure. Prices of processed food products rose 4.6 percent on-year, the highest increase since November 2023. Processed food prices contributed 0.39 percentage point to overall inflation in June. Notable increases were seen in bread and coffee, which jumped 6.4 percent on-year and 12.4 percent on-year, respectively. "Processed food price increases marked a gradual reflection of rising raw material costs and the depreciation of the Korean won," said Park Byung-seon, an official at Statistics Korea. Petroleum product prices inched up 0.3 percent, reversing the previous month's decline. The rise was largely attributed to escalating tensions in the Middle East, which drove up global oil prices. In the service sector, electricity, gas and water charges rose by 1.8 percent, 3.1 percent and 3.1 percent, respectively. Among personal services, prices for dining out and non-dining services rose 3.1 percent on-year and 3.5 percent on-year, respectively. In contrast, prices of agricultural, livestock and fishery products fell 1.8 percent on-year in June. However, egg prices surged 6 percent, marking the steepest on-year increase since January 2022. Core inflation, which excludes volatile food and energy prices, rose 2 percent in June, the same increase as the previous month. (Yonhap)
Korea Herald
8 hours ago
- Korea Herald
[Editorial] Stablecoins, unstable ground
Korea must weigh the risks and rewards of stablecoins amid intensifying dispute In Seoul's financial circles, a new image is emerging: a digital coin emblazoned with the South Korean flag, suspended somewhere between statecraft and speculation. Once a fringe idea among cryptocurrency enthusiasts, the notion of a won-backed stablecoin has moved to the center of the country's monetary policy debate. What appears to be a pragmatic embrace of innovation conceals deeper tensions about the architecture of money, institutional trust and the evolving role of central banks in a digitized economy. At the core of the issue lies a contradiction. President Lee Jae Myung's administration has pledged to foster a stablecoin ecosystem to keep pace with global developments and safeguard monetary sovereignty. The ruling Democratic Party of Korea is advancing legislation to allow private companies — with as little as 10 billion won ($7.4 million) in capital — to issue coins fully backed by the Korean won. Major banks are already registering trademarks and forming blockchain partnerships. Related equities are climbing on speculative enthusiasm. Yet as momentum builds, the Bank of Korea is applying the brakes. Its own pilot project for a central bank digital currency, once touted as a state-led alternative to private stablecoins, has lost traction after years of investment. The central bank, once positioned to shape the digital finance agenda, now finds itself increasingly marginalized. Officials warn that if the market is flooded with privately issued pseudo-money, the bank's ability to manage interest rates, control liquidity and maintain financial stability could be severely compromised. These concerns are not theoretical. The global stablecoin market is overwhelmingly dominated by dollar-based tokens such as USDT and USDC, which account for over 99 percent of transaction volume. Proponents of a Korean alternative argue that without a domestic option, the country risks capital flight and diminished control over trade settlement. But these arguments remain speculative. The BOK, echoing the Bank for International Settlements, has repeatedly cautioned that stablecoins issued by private firms — even when pegged to fiat currencies — pose systemic risks. These include liquidity mismatches, opaque reserves and the danger of a 'coin run' in which investor panic depletes backing assets and triggers broader financial contagion. The collapse of Terra-Luna in 2022 still casts a long shadow over the debate. Procedurally, the rush toward legislation raises additional concerns. Multiple competing bills are circulating in the National Assembly. Oversight is fragmented among the BOK, the Financial Services Commission and the Ministry of Economy and Finance, with no unified strategy in place. The absence of robust consumer protections, capital requirements and clear supervisory authority underscores the lack of regulatory preparedness. Reports that the Presidential Commission on Policy Planning has urged the BOK to 'show flexibility' and devise alternatives reflect mounting political pressure on the central bank to step aside. This disjointed approach points to a deeper dilemma. South Korea seeks to lead in digital finance but remains uncertain about how monetary authority should be shared — or defended — in an era of decentralization. The CBDC's limited progress reflects institutional inertia in the face of rapid technological disruption. Meanwhile, private sector players are advancing with greater speed, louder voices and fewer constraints. The implications extend beyond implementation. A poorly regulated stablecoin framework could distort trade data, fuel asset bubbles and erode trust in the won. Yet delaying reform risks entrenching dollar dependence and leaving South Korea behind in emerging payment systems. The task is to permit innovation while preserving accountability and credibility. South Korea is not wrong to explore stablecoins. But it is wrong to move without a cohesive plan. True stability is not found in code or collateral alone, but in the strength of the institutions that stand behind them.
![[Kim Seong-kon] Do not wage 'war against the academy'](/_next/image?url=https%3A%2F%2Fwimg.heraldcorp.com%2Fnews%2Fcms%2F2025%2F07%2F01%2Fnews-p.v1.20250701.39b022ed0a4548e3ab41a9fa4ebfcc06_T1.jpg&w=3840&q=100)
Korea Herald
8 hours ago
- Korea Herald
[Kim Seong-kon] Do not wage 'war against the academy'
In the 1960s, the great literary critic Leslie A. Fiedler wrote an epoch-making essay, 'The War against the Academy.' In the article, Fiedler advocated the free spirit of the 1960s against the trend toward institutionalism in literary criticism, such as the formalistic New Criticism, and proposed psychological and mythological approaches to literature instead. Such approaches, Fiedler wrote, were a 'revolt against school and in particular against the University. Given the opportunity, the writers of the 1960s prefer, theoretically at least, to go on the road rather than into school; and even, if forced so far, would choose the madhouse over college, prison over the campus.' In his essay, Fiedler criticized the rigid inflexibility of academics who wanted to institutionalize literary creativity and works of the imagination. Six decades have passed since then. Now in 2025, we are witnessing a different type of war within the academy: This time, it is the war against elite, prime universities. Newspaper reports say that our politicians are planning to change the name of ten national universities to 'Seoul National University,' differentiating them by numbers only, such as Seoul National University I, II or X. As a result, the government would provide abundant funds to upgrade them to suit the name, Seoul National University. To make this ambitious project succeed, our politicians must consider various aspects and circumstances. For one thing, they should know that building 10 prime universities is a long-term project that requires patience, endurance and perseverance. For example, Harvard and Oxford each have a long tradition of intellectual history, academic excellence and illustrious human resources. Indeed, a prestigious university is not something you can conjure up overnight. Moreover, we should consider the fact that neither name nor money make a first-rate university. Instead, it requires outstanding students with brilliant minds, eminent professors, and global recognition based on stellar accomplishments, plus a profound intellectual atmosphere. Funds are imperative to give a university such distinctions. However, funds can also be easily wasted if not managed properly by prominent researchers and discreet administrators. Therefore, it will not be easy to carry out the project successfully. Perhaps we can learn from the case of the University of Paris. In 1970, the universities in Paris were dissolved and split into 13 universities. They were called the University of Paris I, II or XIII. But experts have pointed out that the new system has inadvertently made the prestigious Sorbonne invisible under the name Paris IV, and has consequently lowered the prestige of French universities in the international rankings. In 2017, therefore, Paris IV Sorbonne, and Paris VI Pierre and Marie Curie merged as Sorbonne University and in 2019 Paris V and Paris VII merged to form Paris City University. Experts predict that the same thing may happen to South Korea as well. Indeed, the idea of creating 10 universities bearing the same name might eventually make it hard for the original SNU to stand out, thus lowering the rank and prestige of Korean universities in the international assessment. Prime universities represent 'intellect.' Indeed, they say that Seoul National University is an emblem of 'intellect' in South Korea. Among its many important qualities, 'intellect' makes our universities and society elegant and sophisticated. That is why the project is not supposed to be a 'war against intellect.' We hope, too, that such a project is based on 'intellect," not on 'emotion.' If we become emotional, we can easily become jealous, angry and impetuous. Isaac Bashevis Singer once said, 'The very essence of literature is the war between emotion and intellect, between life and death.' He then continued, 'When literature becomes too intellectual — when it begins to ignore the passions, the emotions — it becomes sterile, silly, and actually without substance.' By the same token, we might say, 'if we become too emotional, ignoring intellect, we may become frivolous and superficial, losing decency and dignity.' Indeed, we should pursue the harmony of intellect and passion in our universities and society. In addition, the government should give autonomy to universities and refrain from interference. It also should encourage competition among universities because competition is what gives rise to legendary universities. Unless the goal of the project is to make everyone a graduate of Seoul National University without any competition, the government should instead make tremendous efforts toward building and sustaining ten first-class universities. It would be easy to share the name Seoul National University with local national universities. However, it would not be easy to make ten equally distinguished, first-class universities, even if they all bear that much-coveted name. Our politicians must overcome these obstacles if they want to pursue this project successfully. Alternatively, they may want to make prime universities compete with each other by giving incentives to those that excel. Recently, Sungkyunkwan University and Hanyang University have reportedly been competing with Seoul National, Korea and Yonsei universities. We do not need to wage a 'war against the academy.' Instead, we should make peace with the academy.
