Deputy Prime Minister and Minister of Economy and Finance nominee Koo Yun-cheol is heading to the podium for a press conference held at the Korea Deposit Insurance Corporation (KDIC) auditorium in Jung-gu, Seoul on the 29th. /Courtesy of Yonhap

President Lee Jae-myung appointed former Minister of the Office for Government Policy Coordination Koo Yun-cheol as the Minister of Economy and Finance candidate on the 29th. Consequently, it is expected that the new government's economic policy direction will be established, and efforts will accelerate on this year's tax reform proposal and next year's budget implementation.

Candidate Koo is a seasoned bureaucrat who passed the national administrative examination in 1989 and served as the budget director and vice minister at the Ministry of Economy and Finance, as well as the Minister of the Office for Government Policy Coordination. He has been consistently mentioned as a candidate for the Minister of Economy and Finance due to his strong reputation inside and outside the government.

With Koo's appointment as Minister of the Ministry of Economy and Finance, it is anticipated that key challenges piled up in the ministry will be pursued with efficiency. First, the primary task he will undertake is to establish the economic policy direction for the second half of the new government. The economic policy direction, which is usually announced at the end of June, has been postponed to July or August due to delays in appointing the Minister of Economy and Finance. This time, it is expected to be prepared in the form of the new government's economic policy direction.

This economic policy direction is expected to prioritize measures to improve the livelihoods of people facing difficulties due to weak domestic demand. The Korean economy is projected to experience 0% growth this year, leading to increasing calls for the government to ensure public stability and propose measures for economic recovery.

Candidate Koo also identified the recovery of the economy as the top priority task to be addressed if he is appointed as the head of the economy. Immediately after his appointment as Minister of Economy and Finance on the 29th, he stated at a press conference held at the Korea Deposit Insurance Corporation in Jung-gu, Seoul, "I will do my best to stabilize living prices, which have become a significant burden on people's livelihoods due to soaring inflation," and added, "I will revitalize the local economy so that the capital region and provinces can grow together."

There are high expectations that Candidate Koo will also focus on developing a new growth engine based on artificial intelligence (AI). He has been known as an 'AI evangelist,' advocating for the government to provide full support for AI technology development and talent cultivation.

He is reported to be planning to actively pursue AI-related policies as soon as he passes the confirmation hearing. To achieve President Lee's target of 3% growth, it is essential to leap to become one of the top three AI countries, necessitating comprehensive support across all ministries. The Ministry of Economy and Finance has also reportedly submitted a plan to the Presidential Committee on Policy Planning, stating that it will seek solutions to issues like low birth rates, aging, and declining total factor productivity through AI.

During the press conference that day, Candidate Koo emphasized, "I will push for an economic revolution for genuine growth," stating, "Through focused investments in new industries like AI, I will create new sources of growth." He added, "I will establish a structure that allows all citizens to share the opportunities and fruits of growth, so that the happiness of the people and the nation's development can be mutually reinforcing."

Candidate Koo is also faced with the urgent need to quickly outline the specifics of the tax reform proposal. To complete all procedures such as legislative notice and cabinet approval before submission to the National Assembly, the Ministry of Economy and Finance must hold a Tax Development Review Committee meeting and announce the reform proposal by early August at the latest.

He will lead the preparation of next year's budget proposal while also needing to prepare for the 'National Finance Strategy Meeting' to discuss mid-term fiscal direction. Since the new government previously announced a plan to 'reassess the legislation of fiscal rules' during the preparation of the supplementary budget, there is a high possibility that the meeting will propose an expansionary fiscal management approach.

Meanwhile, Candidate Koo is expected to prepare for organizational restructuring, including the separation of the budgeting function of the Ministry of Economy and Finance and the integration of financial policy departments. President Lee has already announced plans to separate the budgeting function of the Ministry of Economy and Finance and to reorganize the financial policy functions divided between the Ministry of Economy and Finance and the Financial Services Commission.