As President Lee Jae-myung enters his fifth month in office, he is pushing a sweeping structural reform of the regulatory, financial, public, pension, education, and labor sectors. To achieve a rebound in the potential growth rate, the most urgent task, the administration believes it must cut into areas with strong collective resistance, such as securing labor flexibility and shifting the revenue structure of the financial sector. The presidential office sees the early period of the term, when the driving force of state affairs is strong, as the right time. The recent notice to identify and remove public officials involved in the Dec. 3 martial law as part of a public-sector reform rationale aligns with this.
On the afternoon of the 13th at the Yongsan presidential office, Lee presided over a meeting of senior secretaries and aides and said, "Korea's greatest challenge is to reverse the decline in the potential growth rate every time the government changes," adding, "Above all, bold structural reform is necessary to achieve this." Lee also said, "Just as health does not improve even if you take in good nutrients when residue accumulates in the blood vessels, no policy can have its intended effect if society-wide problems are left unattended."
Lee said, "Structural reform comes with pain. It also brings resistance and is not easy. But we must overcome it," adding, "Now that the spark of economic recovery has been lit is precisely the right time for structural reform." He continued, "We must ensure a rebound in the potential growth rate through regulatory reform in the six key areas of regulation, finance, public sector, pensions, education, and labor. We must open a new path for growth," and said, "So that next year becomes the starting point of a major national transformation through full-fledged structural reform, we will prepare thoroughly and with speed."
One of the representative structural reforms the presidential office has flagged is "securing flexibility in the employment market." Since the last presidential election, Lee has emphasized "economic growth through corporations" and "employment flexibility determined by labor-management agreement and a social safety net." Given Korea's economic structure with high external dependence, the logic is that employment types must be flexible to quickly adapt to changes in the global market. As party leader, Lee met with the business community and said, "We must make it so that people can feel that life will not become precarious even if they are not regular workers," calling for the establishment of a social safety net.
Improving the revenue structure of the financial sector is also a major task. Because much of finance operates under licenses and effectively deputizes for the state's currency-issuing power, it must bear an obligation to "pursue the public interest." At last month's "The people's voice becomes policy" roundtable, Lee said regarding loan rates for the lowest-credit borrowers, "The poor shoulder all the financial sector's losses among themselves. Finance is too cruel," noting that a shift in perception based on the principles of community is needed. At the National Growth Fund briefing in September this year, Lee said, "We need a sweeping structural shift to productive finance, not pawnshop-style business that lends money on collateral and collects interest."