[Yoon President Inauguration] 7 out of 18 Confirmed by Hearing Reports... Ultimately a 'Half Cabinet' Start

1st Cabinet Officially Starts Operation
Economic Bureaucrats Massively Positioned from Cabinet to Presidential Office
Priority Given to Solving Economic Issues Including Soaring Prices

[Asia Economy Reporter Kim Hyemin] With the inauguration of President Yoon Suk-yeol, the first cabinet has officially begun its operations. However, as of the first day of the new government on the 10th, only 7 out of the total 18 ministerial candidates have passed the confirmation hearings and had their hearing reports adopted, resulting in a ‘half-formed cabinet’ reality.

According to the newly organized Presidential Office, starting from the day after the inauguration on the 11th, President Yoon will begin appointing ministers upon Prime Minister Kim Boo-kyum’s recommendation, including Choo Kyung-ho, candidate for Deputy Prime Minister and Minister of Economy and Finance; Han Hwa-jin, candidate for Minister of Environment; Lee Jong-ho, candidate for Minister of Science and ICT; Lee Jeong-sik, candidate for Minister of Employment and Labor; Lee Jong-sup, candidate for Minister of National Defense; Jeong Hwang-geun, candidate for Minister of Agriculture, Food and Rural Affairs; and Cho Seung-hwan, candidate for Minister of Oceans and Fisheries. Then, on the 12th, when Prime Minister Kim resigns, candidate Choo will act as Prime Minister and plans to recommend five ministerial candidates?Jung Ho-young for Health and Welfare, Won Hee-ryong for Land, Infrastructure and Transport, Lee Sang-min for the Ministry of the Interior and Safety, Park Bo-gyun for Culture, Sports and Tourism, and Park Jin for Foreign Affairs?whose confirmation hearing reports have been resubmitted. This is because there is a judgment that ministerial appointments must be expedited to hold the first Cabinet meeting of the new government on the 12th.

◆ Economic Dream Team in Operation = The main focus is on how the economic team, including candidate Choo, will respond. From the early days of the government’s launch, there is a high risk of stagflation amid experiences of high inflation.

The inaugural economic team of the Yoon Suk-yeol administration is filled with former economic officials from the cabinet to the Presidential Office. Along with Prime Minister candidate Han Duck-soo, the Presidential Office assisting President Yoon appointed Kim Dae-gi as Chief of Staff and Choi Sang-mok as Senior Secretary for Economic Affairs, completing the core of the economic line. The appointment of an economic expert even as Chief of Staff in the Presidential Office reflects President Yoon’s determination to prioritize the economy. A Presidential Office official said, "There is a widespread assessment that Choo Kyung-ho and Choi Sang-mok would perform their roles well in any economic department." They are expected to actively communicate as an economic ‘one team’ beyond ministries and the Presidential Office. As seniors and juniors from economic departments such as the former Economic Planning Board and Ministry of Finance and Economy, decision-making processes are expected to be swift. Although all are in economics, their specialized fields differ?budget (Kim Dae-gi), policy (Choo Kyung-ho), and finance (Choi Sang-mok)?so there is ample potential for synergy.

◆ Focus on Defending Against Inflation = The inaugural economic team plans to focus primarily on defending against inflation, which is directly linked to the perceived economy. The consumer price inflation rate rose to 4.8% last month, threatening people’s livelihoods. It is the first time since October 2008 that the consumer price inflation rate has approached 5%. At a recent parliamentary confirmation hearing, candidate Choo stated, "The pattern of price instability is expected to continue for some time," expressing his intention to focus on controlling prices to stabilize people’s livelihoods. It is highly likely that the Yoon administration’s first economic measure will be a livelihood stabilization plan aimed at easing the burden of living costs for ordinary citizens.

However, it is not easy to devise measures to curb inflation in a situation where social distancing due to the spread of COVID-19 has been lifted. Immediate consumption expansion movements are stimulating price increases, and the supplementary budget (Choo Kyung-ho) promised to support small business owners is also a policy that injects money, which is expected to place considerable pressure on prices. Moreover, to control inflation, the base interest rate must be raised, which could increase interest burdens on household debt for ordinary people, potentially making livelihoods even more difficult. A political circle official said, "Since the Yoon administration emphasized merit-based appointments and has delivered results, it is now on a testing ground where it must immediately demonstrate its capabilities right after its launch."