[Gwanga in] Bank of Korea Union "Park Chunsup Unsuitable as Monetary Policy Committee Member... Has He Been Restricting Monetary Policy?"

Park Chunsup, Monetary Policy Committee Member, Inaugurated This Morning
First Commute Met with Bank of Korea Union Picket Protest
"Ministry of Economy and Finance Official, Former Public Procurement Service Chief Inappropriate"
Bank of Korea Currently Suing Public Procurement Service
"Former Public Procurement Service Chief Appointed as Monetary Policy Committee Member, How Can This Be?"

Employees belonging to the Korea Bank Labor Union held a protest with placards criticizing newly appointed Monetary Policy Committee member Park Chun-seop on the morning of the 21st at the main gate of the Bank of Korea headquarters on Namdaemun-ro, Jung-gu, Seoul. Park assumed office as a Monetary Policy Committee member on the same day. (Photo by Korea Bank Labor Union)

The Bank of Korea labor union judged Park Chunsub, the new Monetary Policy Committee member and former head of the Ministry of Strategy and Finance and Public Procurement Service, as unsuitable and held a picket protest on his first day at work.

On the morning of the 21st at around 8:30 a.m., the Bank of Korea union held a picket protest in front of the Bank of Korea headquarters in Jung-gu, Seoul, expressing that Park, who was inaugurated as a Monetary Policy Committee member that day, was not suitable for the position.

The union's picket signs read phrases such as "Did you come to tighten monetary policy by dispatching to the field?", "Lawsuit for damages ongoing against Public Procurement Service, yet the head of Public Procurement Service appointed as MPC member," and "What is the meaning of appointing the head of Public Procurement Service as MPC member?"

Park was recommended on the 5th along with Professor Jang Yongsung of Seoul National University's Department of Economics as a successor to MPC members Joo Sangyoung and Park Kiyoung, whose terms ended on the 20th of this month. After the inauguration ceremony that day, he will begin full-fledged activities starting from next month's Monetary Policy Committee meeting.

The reason the Bank of Korea union criticized Park on his first day is because, during his tenure as head of the Public Procurement Service, there was a bidding issue related to the Bank of Korea integrated annex construction, which caused significant damage to the Bank of Korea.

Previously, in December 2017, the Public Procurement Service selected Gyeryong Construction as the successful bidder for the reconstruction of the Bank of Korea annex building on Namdaemun-ro, Jung-gu, Seoul. However, Samsung C&T, which bid 58.9 billion KRW less than Gyeryong Construction but was not awarded the contract, filed a request for adjustment, causing problems.

Subsequent investigations by the Board of Audit and Inspection and the Ministry of Strategy and Finance revealed that Gyeryong Construction actually bid more than the estimated bid price (282.9 billion KRW), and the Public Procurement Service eventually canceled the award in 2019. Gyeryong Construction filed a lawsuit claiming the Public Procurement Service's action was unfair, and the court ruled in favor of Gyeryong Construction, restoring its rights as the successful bidder.

Employees belonging to the Korea Bank Labor Union held a protest with placards criticizing newly appointed Monetary Policy Committee member Park Chun-seop in front of the main gate of the Bank of Korea headquarters on Namdaemun-ro, Jung-gu, Seoul, on the morning of the 21st. Park assumed office as a Monetary Policy Committee member on the same day. (Photo by Korea Bank Labor Union)

After this process, construction of the Bank of Korea integrated annex only began at the end of 2019. The Bank of Korea's plan to move into the integrated annex in the first half of 2020, its 70th anniversary, was canceled, and the construction delay of about three years significantly increased the rent for the Samsung Main Building in Taepyeong-ro, Jung-gu, Seoul, where it currently resides.

In February, the Bank of Korea filed a lawsuit at the Seoul Central District Court demanding the Public Procurement Service compensate about 500 million KRW, part of the increased rental damages. The Bank of Korea union holds the position that Park's nomination as a Monetary Policy Committee member is unreasonable given he was the head of the Public Procurement Service when these issues occurred.

A Bank of Korea union official stated, "The process by which the Public Procurement Service selected Gyeryong Construction as the successful bidder was unclear, causing enormous damage to the Bank of Korea, which is currently suing the Public Procurement Service. From the perspective of Bank of Korea employees, appointing the head of the Public Procurement Service as an MPC member is highly problematic," he pointed out.

In particular, some argue that Park's background as a Ministry of Strategy and Finance official also harms the independence of the Bank of Korea's monetary policy. Park served as spokesperson, economic budget deliberation officer, general budget deliberation officer, and head of the Budget Office overseeing national finances at the Ministry of Strategy and Finance.

Within the Bank of Korea, there is much dissatisfaction that the Ministry of Strategy and Finance minister holds approval authority over the Bank's personnel expenses, resulting in very low salary increase rates. Concerns are raised that a senior Ministry of Strategy and Finance official entering the Monetary Policy Committee might interfere with monetary policy.

Before his appointment as an MPC member, Park had no experience handling macroeconomics, and his recommendation came from the Financial Services Commission, a government agency. For this reason, the market expects Park to show a dovish stance (favoring monetary easing) cautious about raising interest rates, in line with government policy.