Calls are mounting for the early set-up of new economic leadership to navigate the country’s sluggish economy through worsening conditions at home and abroad.

Finance Minister Yoo Il-ho, who doubles as deputy prime minister for economic affairs, has been in an awkward position since Yim Jong-ryong, head of the Financial Services Commission, was named by President Park Geun-hye earlier this month to replace him.


Their awkward cohabitation in the government’s economic team is expected to continue for a considerable period of time as the main opposition Democratic Party of Korea is boycotting a parliamentary confirmation hearing on the finance minister-designate.

The party’s lawmakers say they cannot accept a candidate for the top economic post picked up by Park, whom they are pressing to step down to take responsibility for the ballooning scandal involving her decades-old confidante accused of peddling influence and meddling in state affairs in no official capacity.

“It is not because we are unaware of economic difficulties that we have not agreed (to hold Yim’s confirmation hearing),” Woo Sang-ho, the floor leader of the party, was quoted as saying by a local daily last week.

He argued a new prime minister should first be chosen by bipartisan consensus to oversee the government instead of the disgraced president and be allowed to form a new Cabinet lineup, including the deputy premier in charge of economic affairs.

There seems to be little doubt about the qualification of Yim, a career economic bureaucrat with a reputation as a troubleshooter, who served as vice finance minister. Still, the possibility exists that his designation will be withdrawn by a new prime minister in favor of another figure.

Many economists say the country’s faltering economy surrounded by rising uncertainties both at home and abroad cannot afford to let a political reasoning delay the establishment of firm economic leadership.

“The confirmation hearing process should be undertaken as soon as possible,” said Ahn Dong-hyun, head of the Korea Capital Market Institute.

He said work should be done to enhance economic stability aside from the ongoing political turmoil.

The delayed appointment of a new economic helmsman would hamper the tasks of pushing for the parliamentary passage of the 2017 budget bill, drawing up economic plans for next year and preparing for a possible US interest rate hike in December.

This would complicate difficulties faced by South Korea’s economy, which is struggling with what economists describe as a quadruple decline in exports, consumption spending, investment and employment. Local financial markets have also shown volatile movements since last week’s election of Donald Trump as US president on the back of pledges to strengthen trade protectionism.

A recent report from the Korea Development Institute, a state-run think tank, showed most of the country’s major economic indicators have become worse than in the period leading up to the 1997 foreign exchange crisis.

A rise in protectionist pressure from the US under the Trump presidency is expected to further weigh on Korea’s exports, which has decreased in 21 out of the last 22 months through October.

The slump in exports has been coupled with weakening domestic demand, pushing Asia’s fourth-largest economy deeper into a low-growth rut.

According to the National Assembly Budget Office, South Korea’s private consumption is projected to increase by 2.2 percent next year, down from the estimated 2.3 percent for this year. Construction investment, which is expected to expand by 6.8 percent in 2016, is forecast to grow at a much slower pace of 2.1 percent next year.

The ruling Saenuri Party and minor opposition People’s Party have suggested decoupling Yim’s confirmation hearing from the political situation. Their suggestion hasn’t been met favorably by the main opposition party, which is upping the ante in demanding Park’s resignation.

On Wednesday, Finance Minister Yoo presided over a meeting of economy-related ministers, including Yim, to discuss stable economic management. In the eye of the public as well as watchful economists, it was beyond expectation that the meeting could be a stage for any effective and substantive discussion with no one taking a firm grip of the helm of economic policies.

Experts emphasize whoever will be the replacement for Yoo should be guaranteed to work for a long enough period of time to sort out and carry though measures to get through economic difficulties facing the nation.

Recent analysis of government data by a local news agency found the tenure of the country’s finance ministers appointed since the inauguration of the Kim Young-sam administration in 1993 averaged a mere 13 months, making it hard to keep policy consistency.

Yoo is now in his 10th month in office.

By Kim Kyung-ho (khkim@heraldcorp.com)