Advice from Han Deok-su, a leading candidate for the new government prime minister: "Supplementary budget should be made while maintaining fiscal soundness"

Economic and Diplomatic Expert Switching Between Progressive and Conservative from Kim Young-sam to Lee Myung-bak Governments
"COVID-19 Supplementary Budget Needed Despite Burden... Must Maintain Mid- to Long-Term Fiscal Soundness"
Shares Position with Transition Team on 'Minimizing National Debt Issuance and Restructuring Expenditure'

[Asia Economy Reporter Ki-min Lee] Han Duck-soo, former Prime Minister and a leading candidate for the new government’s Prime Minister under President-elect Yoon Seok-yeol, refrained from commenting on his nomination on the 31st, saying, "I don’t know well. You should actually ask the transition team in charge." However, it is known that within the transition team, Han is viewed as the right person to lead the new government’s ‘economy, diplomacy, and security’ one team, having served as Deputy Prime Minister for Economic Affairs and Prime Minister under the Roh Moo-hyun administration, and as Ambassador to the United States under the Lee Myung-bak administration. He holds the position that the supplementary budget for COVID-19 should be prepared in a way that does not harm the country’s fiscal soundness.

On the 31st, Jang Je-won, chief of staff to President-elect Yoon and a member of the People Power Party, said in front of the tent press room in Tongui-dong when reporters asked, "Han and others are considered leading candidates for Prime Minister. Is there a possibility that a new figure will be nominated as Prime Minister?" "New people? Well... everyone has already come out," he replied. By dismissing the possibility of a surprise appointment of a new Prime Minister, Jang’s remarks have solidified Han’s status as the front-runner for the inaugural Prime Minister. Jang also said, "We have already met with all the people mentioned." A transition team official also said, "It seems highly likely that Han will be selected."

Han, a leading candidate for the new government’s first Prime Minister, is a trade expert who has led the domestic economy across progressive and conservative governments from the Kim Young-sam administration to the Lee Myung-bak administration. He served as Vice Minister of the Ministry of Commerce and Industry under Kim Young-sam, was Ambassador to the OECD Korea delegation and Senior Secretary for Economic Affairs in the Presidential Office under Kim Dae-jung, chaired the Korea-US Free Trade Agreement (FTA) Support Committee in 2007 and served as Prime Minister under Roh Moo-hyun. Under the conservative Lee Myung-bak administration, he served as Ambassador to the United States and was president of the Korea International Trade Association from 2012 to 2015.

In a phone interview with Asia Economy on the same day, Han was extremely cautious about commenting on his nomination as the new Prime Minister but expressed the view that a supplementary budget is necessary for COVID-19 damage recovery and response. Han said, "In principle, even if it is a short-term burden on the finances, costs necessary for COVID-19 (overcoming) support or response should be made."

Regarding the transition team’s stance on minimizing the issuance of deficit bonds, he said, "The supplementary budget method can involve restructuring expenditures or re-estimating tax revenues," adding, "If it really doesn’t work, some borrowing can be considered, but the basic issue is that the fiscal soundness in the medium to long term should be kept in mind."

He continued, "Once fiscal soundness is lost, it is difficult to recover, and fiscal soundness is a critical factor in determining external credibility," adding, "It is important not only how much debt or borrowing is done now, but also the medium- to long-term outlook is closely watched abroad, and maintaining soundness is important for our economy and is a national responsibility."

This aligns with the transition team’s plan to prepare supplementary budget funds through expenditure restructuring. The transition team is reportedly discussing with the Ministry of Economy and Finance ways to minimize deficit bond issuance by eliminating unnecessary government projects. Therefore, some carbon neutrality-related projects and Korean New Deal 2.0 projects, excluding defense and personnel expenses from the existing budget, are being considered as priority targets for reorganization.

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