Yoon vows to put exports first to weather economic challenges

President Yoon Suk-yeol delivers his New Year's address at the presidential office in Yongsan District, Sunday. Courtesy of presidential office

North Korea, diplomatic agenda missing in New Year's speech

By Nam Hyun-woo

President Yoon Suk-yeol said in a New Year's speech Sunday that he will place top priority on revitalizing the nation's exports to weather economic challenges, highlighting the country's economic recovery as being at the top of the agenda for his second year as president.

However, Yoon did not mention North Korea's increasing threats or political cohesion with the opposition bloc, indicating that his administration's main focus is on overcoming global economic difficulties.

"Countries around the world have relied on high-interest rates to counter soaring raw material prices and runaway inflation caused by global supply chain disruptions," Yoon said in the televised New Year's message.

"The possibility of the world economy slipping into a recession this year is higher than ever before… Exports are our key to overcoming this complex crisis. They form the basis of our economy and create jobs."

For South Korea, which has a relatively small domestic market, exports have long been the growth driver of the country, salvaging its economy from major economic crises in the past.

This message came as the country logged its largest-ever trade deficit of $47.2 billion (59 trillion won) due to global energy price fluctuations stemming from the war between Russia and Ukraine although it posted an all-time high in exports of $683.9 billion. This raised voices that trade is no longer confined to the logic of the economy.

"Our export strategy must differ from the past," Yoon said. "Those countries that share the universal values of freedom, human rights and the rule of law are banding together through their economies and industries. This solidarity based on these universal values is the most strategic choice in the current diplomatic landscape."

"I will personally attend to our export strategy while focusing all diplomatic efforts on the economy."

Yoon promised that the government will carry out "a $50 billion project" to help domestic businesses win overseas orders reaching that amount and increase the volume of trade finance to an all-time high of 360 trillion won.

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In this photo carried by North Korea's official Korean Central News Agency on Sunday, North Korean leader Kim Jong-un applauds during a ceremony of "presenting 600 millimeter super-large rocket launcher" held on Dec. 31 at an undisclosed location. Yonhap

However, the president failed to deliver any message regarding North Korea's escalating missile and nuclear threats, even though the regime test-fired one short-range ballistic missile (SRBM) early on Sunday after launching three SRBMs a day earlier.

According to North Korea's official Korean Central News Agency, Sunday, the regime's leader Kim Jong-un ordered the development of new intercontinental ballistic missiles and a larger nuclear arsenal to counter U.S.-led threats.

Kim stressed that South Korea has become the regime's "undoubted enemy," and the current situation highlights "the importance and necessity of a mass-producing of tactical nuclear weapons and calls for an exponential increase of the country's nuclear arsenal."

Yoon's absence of comment on North Korea in his New Year's message contrasts with the hawkish rhetoric that the president spouted on North Korean drones' intrusions into the South last week.

Also, the president did not reference the value of national cohesion or cooperation with the opposition bloc in the address. After the main opposition Democratic Party of Korea (DPK) slashed some of the Yoon administration's key budget proposals last month, the presidential office is increasing its criticisms against the DPK, while the opposition bloc is also mounting offensives against the ruling bloc.

President Yoon Suk-yeol pays respect to deceased patriots during his visit to the Seoul National Cemetery in Dongjak District, Seoul, Sunday. Courtesy of presidential office

Instead of those values, Yoon spent much of his New Year's speech stressing reforms in labor, education and pensions, describing them as tasks that "cannot be delayed any longer."

"There is no future for a country that is preoccupied with vested interests and rent seeking," Yoon said. "The Republic of Korea's future and our future generations' fate depend upon three major reforms: labor, education and pensions."

Yoon said the country's economic growth can be driven by labor reforms, which enable fairness in labor-management relations and flexibility in meeting changing demands in the labor market. And this will be started by the "rule of law in labor relations."

Given his reference to "vested interests and rent-seeking," Yoon's labor reform is interpreted to be targeting large labor unions of big companies. Rent-seeking refers to any activities pursuing increased wealth without creating any benefits or wealth for society.

"The Government must support companies pushing to transition to a duty-oriented, performance-based pay system in a different manner than it does with those that are preoccupied with a system based on seniority that seeks compromise with well-paid, yet demanding unions," Yoon said.

Regarding education, Yoon said that higher education is directly related to the nation's competitiveness and that the government will transfer relevant authority to local areas and provide them the support needed, so they can link education to specific industries of the regions.

For pension reform, Yoon pledged to conduct scientific research and investigations into the financial status of pensions, and collect public opinions.