[Yoon Administration 6 Months] Emphasized Economy and Security... Facing Thorny Path of Domestic and International Adversities and Mistakes

Presidential Office Aides Largely Appointed as Financial Chiefs
Almost Weekly Emergency Economic and Livelihood Meetings Held
Economic Deterioration Due to High Interest Rates and Inflation

Early Economic Forecasts of 'Resolution Phase After October' Miss the Mark
Frequent North Korean Provocations Raise Security Crisis
Frequent Controversies During Overseas Visits Draw Criticism

[Asia Economy Reporter Ki-min Lee] During the six months since President Yoon Suk-yeol's inauguration on the 10th, he has pursued various tasks focusing on the economy and security, but is facing difficulties due to overlapping domestic and international adversities and missteps.

◇Economic Focus Shifted from Finance to Industry... Both Goals Fall Short= Since his inauguration in May, President Yoon appointed numerous fiscal experts as presidential aides and proposed a "dynamic economy led by the private sector and supported by the government," presiding over emergency economic and livelihood meetings almost weekly. However, the economic situation has unfolded differently from what the presidential office and government anticipated. Despite external adversities such as the economic downturn caused by COVID-19 and the global economic restructuring, the existing plan to overcome the crisis by managing both finance and industry has encountered setbacks.

From the first meeting on July 8 through the early 5th meeting, President Yoon mentioned support (23 times), livelihood (18 times), stability (17 times), housing (16 times), and interest rates, loans, and burdens (15 times) in that order. Amid soaring real estate prices over the past five years and increased burdens on ordinary citizens and small business owners due to COVID-19, measures to support the grassroots economy were sought. From the 6th meeting to the recently held 11th meeting, emphasis was placed on government (27 times), market (23 times), support (19 times), agriculture (18 times), digital and exports (16 times), economy (15 times), and technology (14 times). In response to analyses predicting macroeconomic adversities such as worsening current account deficits caused by the triple high phenomenon of high interest rates, high inflation, and high exchange rates, the scale of trade finance was expanded to 350 trillion won, and continuous support for our industries was promised by emphasizing the nurturing of startups and artificial intelligence (AI) industries along with sustainable future industries.

However, the economic crisis breakthrough roadmap envisioned by President Yoon and his presidential office is also facing difficulties. Through door-stepping and regular briefings, President Yoon and his aides have emphasized that even if the current account deficit worsens, our financial market and trade are more stable than those of other countries, and the crisis situation would ease after October this year. Nevertheless, the financial market problems triggered by the Legoland bond crisis and the semiconductor export decline being more severe than expected have led to criticism that "the government was insensitive to the economic crisis."

[Image source=Yonhap News]

◇Active Diplomacy Emphasizing Freedom and Security, but Crisis Intensifies= President Yoon has actively pursued diplomacy emphasizing freedom, security, and solidarity with the international community, but security crises are escalating due to frequent provocations by North Korea, and the economic security situation is also challenging.

Since his inauguration, President Yoon has undertaken two rounds of overseas trips including the Indo-Pacific Economic Framework (IPEF), North Atlantic Treaty Organization (NATO) summit, and United Nations (UN) General Assembly, as well as major bilateral and multilateral diplomatic stages such as the Korea-US summit and Korea-Germany summit. Especially in his speeches at NATO in June and the UN General Assembly in September, he has consistently emphasized freedom, peace, solidarity, and prosperity, but the level of North Korean provocations is rising daily, intensifying the crisis on the Korean Peninsula.

Regarding economic security, which is gaining attention as a new concept in security, the "nuclear alliance" was even mentioned during the Korea-US summit held in May. However, South Korea has been sued for intellectual property rights (IP) by a US nuclear power company seeking to block Korean nuclear power plant exports, and with the US Congress passing the Inflation Reduction Act (IRA), Korean electric vehicles face the risk of losing subsidies in the US.

Moreover, frequent controversies during President Yoon and the presidential office’s overseas trips have drawn criticism. During the NATO trip, controversy arose as Lee Won-mo, the presidential office’s personnel secretary’s wife accompanied the trip, and at the UN General Assembly, President Yoon’s remarks caused national division. Regarding the upcoming Southeast Asia trip from the 11th to the 16th, the presidential office refused boarding to MBC, the broadcaster that first reported President Yoon’s remarks, on the night of the 9th, signaling potential for further fallout.

A senior presidential office official said, "There have been many shortcomings and we could not fully meet expectations during these six months," but added, "We will strive to demonstrate the vision and political direction of the Yoon Suk-yeol administration in the remaining four years and six months."