[Yeouido Interview] Jeong Taeho "What Meaning Does Fiscal Soundness Have After Companies Die?"

Interview with Minju Think Tank Director Minju Research Institute
"Fiscal policy needed now to boost domestic demand"
Key keyword for general election: 'generation expansion'... targeting 'Shinjoonyeon'

"What is the point of having fiscal soundness after all companies have died? Now is the time for fiscal policies to stimulate domestic demand."

Jeong Tae-ho, head of the Democratic Research Institute, the think tank of the Democratic Party of Korea, recently said in an interview with Asia Economy regarding next year's budget proposal, which reflects the government's austerity stance, "We need to grow the economy to reduce debt. Which government makes the irrational decision to spend less money and eliminate debt?"

He added, "The Democratic Party will work on a two-track strategy: expanding contributions to stimulate domestic demand along with a strategy to widen the technological gap to achieve a 3% economic growth rate recovery."

Jung Tae-ho, Director of the Democratic Research Institute. Photo by Hyunmin Kim kimhyun81@

Jeong identified the Democratic Party's winning strategy for next year's general election as being a "competent alternative party." Since taking the helm of the Democratic Research Institute in December last year, Jeong stated at his inauguration, "My mission is to unconditionally win the 2024 general election and create a path to overcome and navigate the crisis that the Yoon Seok-yeol government has wrecked in South Korea." In this interview, he also said, "With the People Power Party already labeled as an incompetent administration, the Democratic Party must demonstrate 'competence' as an alternative party and furthermore show that it is carrying out 'reform' tasks."

Regarding the outlook for the National Assembly's passage of next year's budget, with the legal deadline just five days away, he said, "It depends on how much the government and ruling party accept." He criticized, "The government and ruling party have the responsibility to pass next year's budget within this year so that normal operations can continue," and "They should actively engage in dialogue with the opposition, but I doubt whether they have such willingness."

He continued, "Cutting the budget for local currency is a measure that makes it even harder for small business owners who have been damaged amid the economic crisis following COVID-19. Even if the government wants to eliminate it, now is not the time. Small business owners survive not only by visiting traditional markets but also by maintaining local currency," and urged, "But since this is dismissed as just an 'opposition party claim,' national governance is not functioning. Open dialogue is necessary."

Jeong is also active in the Democratic Party's general election planning team, launched ahead of next year's election. In the election planning team, which is evaluated as being dominated by the pro-Lee Jae-myung faction, Jeong is classified as one of the only pro-Moon Jae-in faction members alongside Assemblyman Han Byung-do. Regarding internal party conflicts over candidate nominations, he emphasized rational candidate selection, saying, "The Democratic Party prides itself on 'systematic candidate selection.'"

Below is a Q&A with Assemblyman Jeong.

- What is the reason for the Democratic Party's landslide victory in the Gangseo District Mayor by-election? Are there tasks to continue the winning momentum until the general election?

▲ I believe Lee Jae-myung, the party leader, expressed it accurately. It was a judgment against the Yoon Seok-yeol administration, not a victory for the Democratic Party. Looking at President Yoon Seok-yeol's governance evaluation, 60% (negative evaluation) was already ready to judge. In the recent Gangseo District Mayor by-election, I think the people gave the Democratic Party a chance. The arrogant candidate nomination by the ruling party was also a reason for the Democratic Party's victory. In that sense, the Democratic Party must approach the upcoming general election with true humility and earnestness. The people turn their backs mercilessly when arrogance prevails. Secondly, it is about the 'livelihood economy.' Recently, when I visited a local hair salon in my constituency, customers who used to come twice a month now come only once. They are closing their wallets due to debt and interest. This year's economic growth rate is also predicted to be 1.4%. A growth rate in the 1% range is the lowest ever, excluding emergency periods. With the People Power Party already labeled as an incompetent administration, the Democratic Party must demonstrate 'competence' as an alternative party and furthermore show that it is carrying out 'reform' tasks.

- How is the Democratic Party's livelihood economy policy different?

▲ In a situation where low growth is becoming structural in South Korea, the important task is 'how to recover the growth rate.' The core is export recovery and domestic demand stimulation. Lee Jae-myung proposed 'suggestions for recovering a 3% growth rate.' To achieve this goal, securing a technological super-gap is necessary.

- The government and ruling party are also presenting policies under the banner of 'livelihood economy.' How do you evaluate them?

▲ The people judge competence based on the 'responsibility' of the government and ruling party. However, seeing plans like incorporating Gimpo into Seoul as Mega Seoul and banning short selling, one wonders if this is a 'responsible government and ruling party.' The 'Busan-Ulsan-Gyeongnam (Bu-Ul-Gyeong) Mega City' for regional balanced development was scrapped overnight, and suddenly 'Seoul Mega City' is being discussed. The government must create policies considering the entire nation. In an era of population extinction and balanced development, it should approach with a responsible vision, but since it is only used as a simple election strategy, opposition is high. During the Lee Myung-bak administration, the 'New Town' project only caused resident conflicts, and now it is being repeated. The damage falls on the people.

- Please explain the recently proposed 'Amendment to the Restriction of Special Taxation Act.'

▲ It is connected to what Leader Lee said at a press conference on the 2nd about establishing a temporary consumption tax credit and securing a budget for local currency. It is a measure to stimulate domestic demand (a plan to provide a 5% tax credit on card usage exceeding this year's amount, up to an annual limit of 500,000 KRW). The idea is to deduct a certain percentage from taxes based on how much is spent, encouraging consumption through tax credits and revitalizing the economy in a stagnation phase to drive economic growth.

- There is a big gap between ruling and opposition parties on the budget issue. Do you think the legal deadline (December 2) can be met?

▲ It depends on how reasonably the government and ruling party accept it. The government and ruling party have the responsibility to pass next year's budget within this year so that normal operations can continue. They should actively engage in dialogue with the opposition, but I doubt whether they have such willingness. Even conservative professors oppose cuts to research and development (R&D) budgets. Also, cutting the local currency budget makes it even harder for small business owners who have been damaged amid the economic crisis following COVID-19. Even if the government wants to eliminate it, now is not the time. Small business owners survive not only by visiting traditional markets but also by maintaining local currency. But since this is dismissed as just an 'opposition party claim,' national governance is not functioning. Open dialogue is necessary.

- What is the role of the general election planning team for next year's election victory?

▲ The concept of this general election planning team is livelihood, innovation, and future. As mentioned earlier, livelihood will be discussed to recover a 3% growth rate, and from the perspective of innovation and future party, the team plans to practice 'embracing diversity' and 'expanding and accepting direct democracy.' Especially regarding the expansion of direct democracy, it has been resolved through the delegate system, but recently, with various means such as social networking services (SNS), opportunities for direct participation have increased. We need to prepare how to harmoniously connect this with existing representative democracy. Regarding innovation, there are proposals from the Kim Eun-kyung Innovation Committee. The task is how to finalize these. We are also considering how to open the door for diverse groups such as youth and women to participate in next year's general election.

- There is internal controversy over the possibility of revising the candidate nomination rules.

▲ The party leader has a firm stance to proceed through 'systematic candidate selection.' A premise of systematic candidate selection is to finalize the candidate nomination rules one year in advance. At that time, the rules were finalized through a vote of all party members. Whether to accept the proposals from the Kim Eun-kyung Innovation Committee will be discussed or not in the general election planning team, but the conclusion should be reached before moving forward.

Pro-Moon Policy Expert... Leading "Generational Expansion" with 'Shin-Jungnyeon'

Jung Tae-ho, Director of the Democratic Research Institute. Photo by Hyunmin Kim kimhyun81@

Assemblyman Jeong is nicknamed a 'pro-Moon policy expert.' He served as Political Planning Secretary, Policy Coordination Secretary, Planning Coordination Secretary, Spokesperson, and Political Secretary during the Roh Moo-hyun administration, and as Policy Planning Secretary and Senior Secretary for Jobs at the Blue House during the Moon Jae-in administration.

He is also devising next year's general election strategy for the Democratic Party led by Lee Jae-myung. He identified 'generational expansion' as the most important keyword for next year's election and introduced 'Shin-Jungnyeon' as a new approach. While recovering support from the 20s and 30s generations, he plans to attract political support from the 'baby boom' generation aged 55 to 65, which is in a policy blind spot.

Jeong emphasized, "We must recover strong support from the 20s and 30s generations and also pay attention to Shin-Jungnyeon. Shin-Jungnyeon is a generation preparing for a new life in the era of 100-year lifespans and requires policy support." He also stated that he will develop tailored policies by life cycle, including employment stability, targeting the 40s and 50s generations.

He particularly said, "I will make the Democratic Party a party leading the artificial intelligence (AI) era." Through fostering the AI industry, he plans to continue the legacy of the Kim Dae-jung, Roh Moo-hyun, and Moon Jae-in administrations' 'IT powerhouse and venture promotion.' Jeong said, "The Democratic Party has always had future-oriented agenda leadership. The Kim Dae-jung administration led the IT industry, the Roh Moo-hyun administration expanded it, and during the Moon Jae-in administration, venture companies were fostered, expanding unicorn companies."

He continued, "Currently, when we talk about future strategic industries, we mention semiconductors, secondary batteries, and bio, but what comes next? It is AI," adding, "Just as South Korea became an IT powerhouse in an inevitable trend, we must become the 'AI era hub' in the future." The goal is to develop policies so that the equation 'Democratic Party = AI' can be drawn and the party can establish itself as a representative of the future.

The Democratic Research Institute recently presented ten national strategic tasks: ▲carbon neutrality ▲inequality in 2023 ▲ultra-low birthrate and population crisis ▲national balanced development ▲economic growth ▲jobs ▲national finance ▲new democracy ▲diplomacy and security ▲education, which will be discussed in detail.

Jeong said, "We are facing new challenges such as population issues, balanced development, inequality, and democracy in this great transition period," and added, "I believe the Democratic Research Institute must at least provide answers that can become Democratic Party policies." He also said, "Policies proposed as national strategic tasks in these ten areas are almost finalized and will be used as pledges for next year's general election."

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