South Korean President Moon Jae-in on Friday sacked the finance minister and his chief policy adviser after their disagreement over how to handle the sluggish economy became public, reported Yonhap News Agency.
Finance Minister Kim Dong-yeon and presidential chief of staff for policy Jang Ha-sung have been replaced, Blue House spokesperson Yoon Young-chan said in a televised statement, according to AFP.
Moon named Hong Nam-ki, an economic technocrat serving as chief of the Office for Government Policy Coordination, as Kim’s replacement. Jang Ha-sung was replaced by Moon’s senior social affairs secretary Kim Soo-hyun. Jang is the architect of the president’s trademark “income-led” growth policy.
The two sacked officials have differed on how to revitalise the sluggish economy. Kim called for a need to change from the “income-led” growth policy and cut back on redistributive policies, while Jang insisted on sticking to the policy.
Moon’s administration has raised minimum wages in South Korea, reduced working hours and converted temporary staff to permanent in a series of moves that the administration says will lead to “income-led growth”. This is a major change from the growth-centred model of the past, which focused on exports and investments by the South Korean companies.
Last month, the Central Bank of Korea cut its growth forecast for this year to 2.7%, down from the 3.1% achieved in 2017. Unemployment in the country was up 0.4% at 3.8% in the third quarter. Youth unemployment was at its highest since 1999 at 9.4%.
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