[Seoul Economy]
Kim Dong-yeon, the Governor of Gyeonggi Province, argued on the 19th that over 30 trillion won should be invested in future economic sectors to rebuild the South Korean economy, which is currently in crisis due to the December 3 martial law incident.
In an urgent press conference held at the provincial government office, Kim proposed such government financial management plans to the central government and the National Assembly.
Recalling his past experience as the inaugural Deputy Prime Minister for the Economy under the Moon Jae-in administration, which was established after the impeachment of President Park Geun-hye eight years ago, Kim mentioned that he had successfully boosted South Korea’s economic growth rate from 2% to 3% through an 11 trillion won supplementary budget at the time. He also recalled his role as the Blue House Economic and Financial Secretary during the 2008 financial crisis, where a similarly sized supplementary budget of 10 trillion won helped the economy recover quickly.
Regarding the overall governance of the Yoon Suk-yeol administration, Kim criticized, stating that “in terms of economy, foreign affairs, climate response, and even democracy, South Korea’s clock has been turned backward,” and specifically labeling the economy as a “comprehensive crisis” concerning domestic demand, investment, and exports. He condemned the situation, mentioning, “Amid this, the illegal martial law orchestrated by a ‘rebellion leader’ has put our economy in a critical crisis, adding insult to injury.”
Kim emphasized the need for a major turnaround in economic policy, stressing that first and foremost, the framework of fiscal and financial policies must be altered. He proposed three principles under ‘R.E.D,’ which stands for implementing actions rapidly (‘Rapid’), more than adequately (‘Enough’), and decisively (‘Decisive’) to exceed market expectations.
He proposed an increase in fiscal involvement of at least 30 trillion won into future industries and people’s livelihood economy. He detailed that at least 10 trillion won should be invested in securing artificial intelligence (AI) sovereignty, biohealth innovation, and establishing bases for the aerospace and quantum industries. Additionally, at least another 10 trillion won should be allocated to support operational and labor costs for small business owners and to promote youth employment innovation. Kim urged the immediate implementation of ‘Living Recovery Support Fund’ and highlighted the importance of increasing financial mediation support loans by 10 trillion won.
In terms of boosting domestic demand and alleviating the burden on households and businesses, Kim insisted that the Bank of Korea should ‘big cut’ its base interest rate by 0.5% at the earliest opportunity.
Kim pointed out that the South Korean economy is caught in a vicious cycle of economic stagnation leading to reduced tax revenues, fiscal deterioration, and diminished consumption and investment. He stated that a virtuous cycle should be established where expanded fiscal input leads to economic vitality recovery, tax revenue increase, and normalization of fiscal functions.
He concluded, “Impeaching the President takes time, but our economy and the livelihood of our people cannot wait until then. Economic policies, especially fiscal policies, should be ‘impeached’ as soon as possible. This is the people’s mandate.”