Korea's economy will run like a business for growth: finance minister nominee

Korea Herald

18 hours ago

Koo Yoon-cheol pushes productivity, real growth to boost public livelihoods
South Korea's finance minister nominee, Koo Yoon-cheol, vowed Sunday to manage the national economy with the rigor of a private company, focusing on return on investment and making government spending more productive.
'South Korea must pursue real growth, and that requires a fundamental overhaul,' Koo said during a press briefing shortly after his nomination was announced. 'We must run the economy like 'Corporation Korea,' where the people are our shareholders.'
Koo, tapped as the first finance minister under President Lee Jae Myung, will be responsible for steering the new administration's economic policy. His comments aligned closely with Lee's top priority of improving public livelihoods, a message the president has underscored since taking office.
'I feel a deep sense of responsibility in being nominated at a time when the Korean economy faces serious challenges,' Koo said. 'But responsibility alone isn't enough — we must act. The most urgent task is stabilizing prices and easing the burden on ordinary citizens.'
Koo also pledged to revitalize regional economies outside the capital area and address seasonal safety concerns as Korea approaches the peak of summer. Externally, he pointed to rising risks from US tariff negotiations, the war in Ukraine, and tensions in the Middle East.
'I will respond actively and step by step to the challenges confronting our economy,' he said.
A veteran of budget policy, Koo likened managing the national economy to running a business — where every investment must be justified by returns.
'It all begins with cost-benefit thinking,' he said. 'A company that makes bad investments eventually fails. The same applies to a country. Korea must ensure that every unit of spending delivers value — whether by cutting costs, raising revenue, or finding new engines of growth.'
Koo reaffirmed the Lee administration's expansionary fiscal stance, but with a focus on measurable outcomes.
'We must approach fiscal policy from a performance-based perspective," he said. "If more spending leads to growth, we spend more. If it doesn't, we cut back. In the short term, we operate flexibly. But in the long term, what matters is spending productively — even if that means spending more — to ensure sustainable growth.'
He also stressed the need for systemic reform and future-oriented investments.
'We'll invest strategically in emerging industries like AI to build new growth engines, ensuring all citizens share in the opportunities and rewards of economic expansion and creating a virtuous circle between national progress and public well-being," said Koo.
A visiting professor of economics at Seoul National University, the minister nominee has long argued that AI is Korea's next great economic engine. In April, he reportedly said, 'Korea's golden time lies in the next five years — our future depends on AI.'
The seasoned bureaucrat returns to the Finance Ministry after five years, having last served as second vice finance minister under President Moon Jae-in, overseeing budget and fiscal policy until May 2020. He previously held several high-level posts at the ministry, including director general for budget planning and for social spending, and was widely regarded as the architect of Moon's 'people-centered economy.'
He also held senior positions in the presidential office under President Roh Moo-hyun, including director of government affairs and secretary for personnel. From May 2020 to June 2022, he led the office for government policy coordination.
In announcing his nomination, the presidential office described Koo as 'someone who has long explored how to drive innovation in Korea,' and 'ideally positioned to chart a path for national growth, backed by deep expertise in finance and policy.'
Koo steps into the role with considerable responsibility, following a nearly two-month vacancy after the sudden resignation of former finance minister Choi Sang-mok.
Although the finance minister typically also serves as deputy prime minister for the economy, the presidential office did not clarify whether Koo would take on that role — fueling speculation of a broader structural shake-up.
President Lee has previously proposed splitting the Finance Ministry into two branches, one for budgeting and another for fiscal policy, to curb its influence and bring budgetary oversight closer to the presidential office.
He will be formally appointed following a parliamentary confirmation hearing. Once confirmed, Koo will immediately face a packed agenda — setting the new administration's economic direction, preparing next year's budget, and responding to trade risks and domestic headwinds.
'Having risen from one of the world's poorest countries to the brink of developed-nation status, Korea has already experienced what it means to lead globally — and I believe we can do it again, and must,' Koo said.
'The country must achieve real growth to ensure people's happiness. I will devote myself to making that happen — and to making sure the benefits of that growth return to the people and improve their lives.'