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| Finance Minister Kim Dong-yeon speaks into a microphone about the government's plan to boost the social safety net at a job training center in Seoul on Aug. 16. Courtesy of the Ministry of Economy and Finance |
By Park Hyong-ki
The Moon Jae-in administration's income-led growth policy is expected to be assessed along with the country's financial soundness by a group of economists and analysts from the ASEAN+3 Macroeconomic Research Office (AMRO) this week.
The Ministry of Economy and Finance said AMRO Director Junhong Chang will be leading a group of eight including chief economist Khor Hoe Ee and Sumio Ishikawa, an economist to meet officials from the ministry, the Bank of Korea (BOK) and the Korea Development Institute (KDI).
They will comprehensively review and analyze the government's macroeconomic policies during their visit to Seoul.
"They will be meeting officials here to discuss about the government's economic policy and the soundness of its financial market," the finance ministry said in a press statement.
It remains to be seen whether the Singapore-based economic center will continue to back Moon's income-led growth policy like it did last year, given it has become the source of controversy following reports of weak employment and high self-employed business closures.
Last year, the AMRO expressed its support for the policy. But its director told the press that Asia's fourth largest economy is facing downside risks such as rising household debt and unemployment. Also, its growth mostly from exports was not benefiting the low-income group, it noted.
Following the International Monetary Fund's advice, the AMRO suggested Korea to promote "inclusive growth." In May, the AMRO projected Korea to grow 2.9 percent this year, and slow down to 2.8 percent next year, while forecasting 10 economies of Southeast and Northeast Asia to grow 5.4 percent this year.
Finance Minister Kim Dong-yeon has been debating with lawmakers at the National Assembly, arguing whether President Moon's income-led growth has failed. Also, he has been facing questions whether his policy views and directions differ from those of Jang Ha-sung, the presidential chief of staff for policy, who is considered the architect of the income-led growth policy.
Minister Kim said last week that he "takes responsibility" from the policy failing to create jobs for the young, adding he and Jang had differences over it, but "it does not mean the minister does not support the government's pro-labor policy."
Jang also mentioned there were some differences, but "not to a degree of both facing a conflict" over the issue, which has been reviewed and discussed thoroughly between the finance ministry and Cheong Wa Dae.
The contention between the two has been highlighted especially after Statistics Korea announced the number of jobs created in July stood at 5,000.
The AMRO was established in 2011, aimed at monitoring and assessing market risks and soundness of Southeast Asian economies and Korea, China and Japan that sealed the Chiang Mai Initiative Multilateralisation Agreement in 2010.
It is expected to release a report at the end of this year after its assessment.
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