Moon Jae-in plays peacemaker on the world stage but unpopular economic policies hurt him at home
- South Korea last month lowered its growth forecast for 2018 to 2.6 per cent – the slowest pace in six years.
- The slowdown has been exacerbated by trade tensions and softening global demand
Moon Jae-in began his second full year as South Korea’s president with a reminder of what didn’t work in the first – namely his economic policies.
The message came in an unusually blunt question from a local television reporter, who used Moon’s New Year’s news briefing on Thursday to ask why he stuck with an agenda that appeared to be failing. The president dug in, saying he needed to better persuade South Koreans his policies were right, not change course.
“I’ve explained why we need our government’s economic policy basis, and why it’s impossible to have sustainable growth without changing the imbalanced structure of our polarised society,” Moon said. “So, I don’t think I need to reply with a new answer.”
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The episode underscored how South Korea’s slowing economy has emerged as a political liability for Moon, even as he’s enjoyed the global spotlight from playing peacemaker between US President Donald Trump and North Korean leader Kim Jong-un. The self-styled “jobs president” has seen his once-sky-high poll numbers tumble, raising the prospect that he could face the same popularity problems that dogged his predecessors.
Moon, a progressive, was swept into office in 2017 promising a reversal from the conglomerate-focused economic agenda of ousted President Park Geun-hye. But his plan to raise the minimum wage 11 per cent disappointed both workers who didn’t think it was enough and businesses who said it stifled growth.
More than three-quarters of the 30 experts surveyed by Bloomberg News last month predicted that employment growth would slow this year, in part because of the wage hike. Moon axed his finance minister and his policy chief after criticism that his administration was sending mixed signals on the policy.
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It’s impossible to have sustainable growth without changing the imbalanced structure of our polarised society
Choi Pae-kun, an economics professor at Konkuk University in Seoul, said that the president and his lieutenants weren’t considering how their wage moves hurt their related push to encourage entrepreneurship.