[Sok Interview by So Jongseop] Yoo Jong Il: "Lee Jae Myung Called and Asked Me to Develop a Growth Strategy"

Interview with Yoo Jong Il, Co-Representative of Growth and Integration
"Nuclear Power Is Essential, We Must Build New Plants as Soon as Possible"
"Seniority-Based Wage System Must Be Reformed to Enable Retirement Age Extension"

Yoo Jong Il, Executive Co-Representative of 'Growth and Integration,' appeared on the Asia Economy YouTube channel 'AK Radio.' In an interview that lasted one hour and twenty minutes at the Asia Economy studio in Chungmuro, Jung-gu, Seoul, starting at 9:00 a.m. on the 18th, Yoo stated, "If you go against market principles, you will fail to achieve your goals and only increase side effects." Criticizing the Moon Jae In administration's nuclear phase-out policy, he asserted, "Nuclear power is absolutely necessary. We should build new nuclear power plants as soon as possible." He also emphasized the need for reform, saying, "We must reform the seniority-based wage system in order to extend the retirement age." Yoo, who mentioned that he now sleeps much less, added, "Still, I make sure to work out at the gym twice a week," explaining that he manages stress through exercise.

Lee Jae Myung's think tank 'Growth and Integration' Executive Co-Representative Yoo Jong Il appeared on Asia Economy AK Radio and is being interviewed by political specialist So Jong Seop. Photo by Huh Young Han

The media often refers to Growth and Integration as 'Lee Jae Myung's think tank.'

It's undeniable that this group started because I have had a long relationship with former Representative Lee Jae Myung and have provided policy advice to him. However, Growth and Integration is not officially responsible for formulating Lee Jae Myung's policies. Rather, it is a voluntary organization, similar to a civilian corps, where intellectuals and policy experts have come together with the intention of preparing good policies so that events like martial law and impeachment never happen again in this country. Initially, the focus was on economics, but the scope has gradually expanded. There are now 34 divisions.

It is said that reading 'Logic of the Transition Era' and 'Gaeckji' was a turning point in your life.

During my school days, I genuinely enjoyed having fun. I was good at math and physics, so I was in the science track in high school. I had always had some interest in history, society, and politics, but I think it was during the summer vacation of my first year in high school that I encountered those books. From that point on, the world looked different to me. I realized that the knowledge I had been taught was not everything, that there really are facts and a world out there that I didn't know about.

So I thought, in this era of military dictatorship, can I just do things that are fun for myself? Shouldn't I study social sciences and try to find my own role? While grappling with these thoughts in my third year of high school, I switched to the liberal arts track and entered the social sciences department at Seoul National University. In that sense, it was a turning point in my life.

You were once called 'Roh Moo Hyun's private tutor' and strongly advocated for chaebol reform. What about now?

It's a bit awkward to say this myself, but it's true that I played a decisive role in formulating former President Roh Moo Hyun's policy pledges. Even back then, I faced resistance from those who wanted to keep me in check, and that was tough. Because I was impatient and inexperienced, I would push my arguments forcefully, narrowing my own position when I thought things weren't moving in the right direction quickly enough. There were several opportunities to participate, but our views didn't always align.

The reason I strongly advocated for chaebol reform was due to the circumstances of the era. I returned to Korea in mid-1997, just before the foreign exchange crisis, after teaching as a professor in the United States, the United Kingdom, and Japan. The International Monetary Fund (IMF) also called for chaebol reform at that time. The problems of octopus-style management were fully exposed. At the time, the tripartite labor-management-government council also reached an agreement on chaebol reform. We should have carried out the reforms as originally planned, but during the election, the focus shifted to economic stimulus. The reforms were abandoned midway. From that point on, I told the Kim Dae Jung administration, "This is not the way."

You were also opposed to the Korea-US FTA. How do you view it now?Has your position changed?

My position has not changed much. Then and now, I have never opposed free trade. There were two reasons why I opposed the Korea-US Free Trade Agreement (FTA) negotiations. First, the proponents claimed that this would allow us to adopt American-style systems. American-style systems are absolutely not good for the Korean economy. Isn't that the reason why President Donald Trump is acting the way he is now? The initial draft of the negotiations allowed Wall Street financial firms to sell financial products in Korea without even opening branches. After that, the global financial crisis occurred. In that sense, my concerns were proven correct. The other reason was the investor-state dispute settlement system (a system that allows international arbitration to resolve disputes when a company investing abroad suffers property damage due to unfavorable local policies or laws), which I also argued was not a good thing. Later, the regulations were improved to prevent arbitrary actions in public policy and other areas. I have never opposed the expansion of trade itself, but I did point out the dangers involved.

Representative Yoo formed a connection with former Representative Lee Jae Myung over 10 years ago and has been providing policy advice from time to time. Photo by Heo Young Han

How did you come to know former Representative Lee Jae Myung?

In the early days of Lee's political career, he was close to Representative Chung Dong Young, whom I also knew well. As a result, we developed a kind of camaraderie. When Lee was running for mayor of Seongnam, I helped him a bit. At that time, I was running Jubilee Bank, and I noticed he was doing a good job as mayor. I saw how effectively he cracked down on illegal private lending and supported vulnerable debtors, and I thought he was someone to watch. When he sets his mind to something, he gets it done even if it's a burden, and seeing that made me hold Lee in high regard.

So you've observed Lee up close for over ten years.

There are three things I want to highlight about Lee Jae Myung as a politician. First, he fundamentally possesses a sense of justice and fairness. As someone who started as a boy laborer and overcame adversity, he is a self-made man. He believes that those in difficult circumstances should also be given a chance to succeed, and that the state must do its utmost to ensure everyone can enjoy a basic standard of living.

Second, he is extremely competent.He has a knack for getting things done and dedicates himself fully to his goals. I believe he is capable of fixing a broken Korea. Third, he is an excellent communicator, which is the greatest weapon of a politician. He identifies the core of an issue and explains it in a way that is easy to understand. That is a tremendous strength.

It seems Lee had specific expectations of you this time.

During the recent crisis, he called me and we spoke at length. The first thing he said was, "Professor, you are retired, right? Please develop a growth strategy." He is always direct and to the point, so I could tell he was sincere. Previously, some people questioned his shift to the right after talking about basic income, but I think his understanding of the economy and the market has deepened and matured. He now has a clear perspective on what issues need to be addressed first.

I once asked President Kim Dae Jung what he thought of the saying, 'Reward those who have made contributions, and give positions to those with ability.' Even before I finished, he agreed 100 percent. He said he would not care about whether someone worked in a past administration or whether they were conservative or not, but would broadly recruit talented and upright people. He has since reaffirmed this attitude. That's why I decided I should do my best to help.

I saw the term 'second economic crisis' in the Growth and Integration press release. Is the Korean economy really that serious?

Yes, it is. The foreign exchange crisis was a liquidity crisis.When problems arose with foreign currency liquidity, foreign capital rapidly withdrew, causing banks to collapse and triggering a chain of bankruptcies. It was an enormous crisis, but the recovery was also rapid. There were structural problems and reforms were needed, but there was no fundamental issue with the basic productivity of the Korean economy.

But now, the fundamentals are in trouble. The rate of productivity growth is steadily declining. The value of the won has fallen. The exchange rate keeps rising. We should at least be selling more, but our export market share keeps dropping. We have wasted the past ten years. With trade issues from the United States and aggressive competition from China, our industries are in an unsustainable position. The seriousness lies in the fact that this is not a temporary problem. We need to wake up and achieve a dramatic transformation.

Representative Yoo emphasized that the economic strategy called the '345 Strategy,' which focuses on growth and integration, is fully achievable. Photo by Heo Younghan

You mentioned the 3 (potential growth rate) - 4 (four major export powers) - 5 ($50,000 per capita income) strategy. However, some question its feasibility.

It's not easy. Various institutions such as the Organization for Economic Cooperation and Development (OECD), the Bank of Korea, and the Korea Development Institute (KDI) all say that the potential growth rate will continue to fall. Iam saying that we need to wake up and reverse this downward trend, aiming to raise the potential growth rate to 3 percent by 2030.To maintain a base level of around 3 percent, we need a dramatic transformation.If companies and the public participate with a 'let's give it a try' attitude, it is entirely possible.

Han Dong Hoon, former leader of the People Power Party, strongly criticized it as a "fake economy."

I understand the desire to attack since Lee Jae Myung is far ahead. But he should have done his research first.There are too many errors. It seems he has no basic understanding of economics. If you want to be a national leader, you need to study economics, but how can you not even study the basics? It's concerning to see such ignorance. In fact, $50,000 is not an ambitious goal.Three percent is honestly a bit ambitious. Butif we do our best for the sake of future generations, it is a fully achievable goal.

What is meant by the term 'entrepreneurial government'?

Some might criticize the idea that the government should demonstrate entrepreneurial spirit. After all, it's the companies that should be entrepreneurial, not the government. Some may argue that the economy should be left to the market and the government should just do its job. There is room for misunderstanding.However, surprisingly, most people agree.What is entrepreneurial spirit?It is about taking risks and trying new things. The government must provide national defense, maintain public order, and manage stability. But the current era is different. With extreme climate change and rapid advances in artificial intelligence (AI), we are experiencing fundamental changes in our lives and in industrial and economic activities.

This great transformation is happening globally.In such times,the government should take the lead in mobilizing collective intelligence and wisdom to create initiatives that make people and companies want to participate, thinking, 'Yes, this is the way forward. This could work.' To instill greater confidence and encourage active participation, the government must also be willing to take on risk as needed. That is the entrepreneurial spirit. This is what is called 'priming the pump' investment, and the government needs to provide institutional and policy support.

You've often said that AI can be a growth engine for Korea. How is that possible?

It is impossible for us to compete head-on with the United States and China in fundamental AI models and come out on top.We must not mislead the public with such unrealistic plans.However, there are areas where we can excel. What I can say with confidence is thatwe are world-class when it comes to utilizing AI.

We can become a leading country in developing systems that maximize the positive power of AI and minimize potential problems. Even now, Korea is actively participating in and, in some cases, leading international discussions on such topics. If a UN-affiliated international organization on AI norms is established, I hope Korea can host it.

What are your thoughts on exceptions to the 52-hour workweek?

Many business leaders express dissatisfaction. However, compared to our income level, working hours are still too long and the number of industrial accidents is embarrassingly high. While there may be inconveniences for businesses, I hope they will take a more forward-looking approach. There are systems like the discretionary work system, so why cling to exceptions?

Much more important is genuine innovation. If we create an environment that encourages innovation?through regulatory reform, incentives, and the role of an entrepreneurial government?then the private sector can take the lead in driving innovation, productivity growth, and the transition to AI. I hope this can become a true partnership.

At the launch ceremony of former Democratic Party leader Lee Jae Myung's think tank "Growth and Integration" held on the 16th at the National Assembly Library Auditorium in Yeouido, Seoul, Yoo Jong Il (left) and Hur Min, co-chairmen, are applauding. Photo by Yonhap News

What are your thoughts on nuclear power? The Yoon Suk Yeol administration has announced plans to build two new nuclear power plants in its basic power supply plan. What is your position?

During the Moon Jae In administration, I was the head of a public institution, so I couldn't speak out loudly because I needed to secure budgets. But even then, I argued through various channels that the nuclear phase-out policy was wrong.I also publicly criticized the rapid increase in the minimum wage. When it comes to nuclear power, we cannot ignore public concerns about safety. However, from a scientific perspective, nuclear power is much safer than thermal power generation. Safe technologies are continuing to advance. Renewable energy is not produced consistently, nor do we have the conditions to produce large amounts of cheap renewable energy. We must actively pursue renewables, but nuclear power is also absolutely necessary. After the Democratic Party's defeat in the recent U.S. presidential election, journalist and political commentator Ezra Klein emphasized the concept of 'abundance.'

Is that related to nuclear power?

Yes.He argued that the Democratic Party could have created a much more prosperous and progressive society, but made foolish mistakes.Instead of restricting things, we should keep creating better alternatives so that inferior ones are phased out, but excessive regulation killed truly progressive possibilities. That, he argued, was a grave mistake. He cited two main examples.

One is excessive regulation of housing construction. Because of this, home prices have continued to rise in Democratic strongholds like California and New York, and he argued this was a huge mistake. The same applies to us.Real estate policy should also follow market principles. It's important to ensure sufficient supply in locations where people actually want to live.The other is nuclear power.Ezra Klein is a strong environmentalist. But he argued that nuclear power is necessary to ensure clean air and reduce greenhouse gas emissions, and that we made a foolish mistake by opposing it. This is the direction the world is now heading.

What do you think about building new nuclear power plants?

It's not something that can be done immediately, but not only should we do it, we should do it as quickly as possible. That's my personal opinion.

Your thoughts on extending the retirement age and the seniority-based wage system?

The seniority-based system was suitable for a time when companies were growing and the population was increasing, fitting a pyramid structure. It was a concept from the era of lifetime employment. Now, the demographic structure is becoming an inverted pyramid, and companies cannot sustain the seniority-based system.We are no longer in the era of lifetime employment. This system must be reformed. Only then can we extend the retirement age in some form, and we absolutely should.

What is your basic direction for real estate policy?

It is absolutely wrong for the government to force people, especially young people, to make all-in investments in real estate out of fear of not being able to buy a home. We must deeply reflect on the failure of such policies. I have always emphasized to policymakers, including Lee Jae Myung, that we should use market principles to achieve policy goals. If you try to force things by going against the market, you will fail to achieve your goals and only increase side effects. The same applies to real estate policy. Demand varies by class and age, and we should actively pursue supply in locations that are convenient for commuting and schooling, not just talk about it like the Yoon Suk Yeol administration, but actually implement it immediately. Our experts are preparing many such plans.