New gov’t must avoid populism, pursue bold measures

New gov’t must avoid populism, pursue bold measures

최초입력 2025.06.05 10:31:06

(Joint Press Corps)

South Korean President Lee Jae-myung issued his first executive order after taking office on Wednesday, directing the formation of an Emergency Economic Response Task Force (TF).
This move follows his inaugural address, in which he declared that restoring livelihoods and reviving the economy would be the top priorities of the new administration.
As the former leader of the Democratic Party of Korea, Lee consistently emphasized the importance of addressing everyday economic concerns. The Korean economy posted negative growth in the first quarter of 2025, with weakened investment and consumer sentiment deepening the struggles of small business owners, small and medium-sized enterprises (SMEs), and vulnerable groups.
Lee’s declaration of a “decisive battle against recession” on his first day in office reflects a strong sense of economic urgency. He also indicated plans to promptly implement a supplementary budget, stating that “national finances will serve as the priming water to revive a virtuous economic cycle.”
Lee Han-joo, head of the Institute for Democracy and a key policy advisor to the president, confirmed the plan for a president-led emergency economic TF and mentioned that the supplementary budget would likely include allocations for local currency programs.
The swift passage of a supplementary budget will be crucial to jump-starting domestic demand, which remains in critical condition.
Given that revitalizing the flow of money and boosting domestic consumption will not only invigorate the stock market but lay the foundation for long-term, sustainable growth as well, it is imperative that the government take urgent and bold action.
However, it is also vital to guard against the temptation of populist measures.
Cash-based assistance programs, such as local currency vouchers, may provide short-term relief but have clear limitations and must be managed carefully to avoid exceeding appropriate levels.
Populist policies that ignore fiscal soundness can lead to a growing national debt, passing the burden on to future generations. The planned supplementary budget should focus on high-multiplier sectors and export support to maximize economic impact.
Lee has pledged a pragmatic approach to governance, stating that “if policies from former Presidents Park Chung-hee or Kim Dae-jung prove necessary and useful, I will use them without hesitation.”
In this regard, the new administration is also tasked with implementing bold regulatory reform, structural adjustments, and measures to encourage corporate investment - critical steps for improving the economic fundamentals and reviving domestic demand.
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New gov’t must avoid populism, pursue bold measures

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