President Moon's Reason for Reappointing Deputy Prime Minister Hong Nam-ki as 'Economic Commander' (Comprehensive)

Disagreement Between Ruling Party and Government on Major Shareholder Transfer Tax, Deputy Prime Minister Hong Resigns... President Moon Immediately Rejects and Reaffirms Support

[Asia Economy Reporter Ryu Jeong-min] President Moon Jae-in rejected the resignation of Hong Nam-ki, the Deputy Prime Minister for Economy and Minister of Strategy and Finance, who is the 'economic commander-in-chief.' It is noteworthy that President Moon expressed his confidence in Hong immediately after he tendered his resignation. This reflects the judgment that 'Hong Nam-ki's leadership' is necessary to overcome the economic crisis caused by the COVID-19 pandemic at an early stage.

Hong Nam-ki's resignation was revealed during the plenary session of the National Assembly's Planning and Finance Committee on the afternoon of the 3rd. The resignation of the economic commander-in-chief itself is a matter with considerable impact, drawing attention from both inside and outside the political sphere. An interesting point is that the Blue House released a message rejecting the resignation immediately after the news was made public through Hong Nam-ki himself.

Kang Min-seok, spokesperson for the Blue House, told reporters, "Hong Nam-ki tendered his resignation to the President immediately after today's Cabinet meeting, but the President promptly rejected it and reaffirmed his confidence." Hong attended the Cabinet meeting on the 3rd and then expressed his intention to resign to President Moon, but the President not only rejected it immediately but also expressed his intention to reaffirm confidence.

[Image source=Yonhap News]

The controversy over Hong Nam-ki's resignation is closely related to the disagreement between the ruling party and the government over lowering the major shareholder capital gains tax threshold from the current 1 billion KRW to 300 million KRW. Hong Nam-ki took the position that adjusting it to 300 million KRW was appropriate, but the ruling party urged cautious handling considering public sentiment, including investor unrest.

After high-level consultations between the ruling party and the government, it was concluded to maintain the current threshold of 1 billion KRW, and Hong Nam-ki reportedly tendered his resignation as a way of taking responsibility for the controversy. The ruling party was concerned that expanding the tax base could weaken the investment enthusiasm of stock investors, known as 'Donghak Ants.'

However, Hong Nam-ki emphasized the necessity of adjusting the major shareholder capital gains tax criteria, stating that the market impact would be limited.

Deputy Prime Minister for Economy Hong Nam-ki attended the plenary meeting of the Planning and Finance Committee held at the National Assembly on the 3rd and adjusted his glasses while receiving questions related to his resignation. Photo by Yoon Dong-ju doso7@

President Moon's rejection of the resignation and expression of reaffirmed confidence reflects the judgment that replacing the economic commander-in-chief is inappropriate given the reality that the Korean economy is recovering rapidly even amid the global COVID-19 crisis. It also means that 'Hong Nam-ki's leadership' is necessary to promote key national tasks that President Moon is focusing on, such as the 'Korean New Deal.'

Earlier, at the Blue House senior secretaries and aides meeting on the 2nd, President Moon stated, "If the economic rebound trend continues in the fourth quarter, our economy will be able to recover from the shock of COVID-19 and enter a normal trajectory from the first half of next year," adding, "The government will create an economic model country following the exemplary quarantine nation together with the people."

Through President Moon's reaffirmation of confidence, Hong Nam-ki's influence in decision-making has been strengthened again, but whether the embers of the 'resignation controversy' will subside remains to be seen. With the possibility of a year-end cabinet reshuffle being raised, it also means that the position of Minister of Strategy and Finance could be included among the candidates.

This content was produced with the assistance of AI translation services.