By Choi Sung-jin
With just one month to go before the New Year, the Korean economy is facing enormous uncertainty at home and abroad, the resolution of which will determine Korea Inc.'s performance in 2016, experts say.
The biggest uncertainty is who will take economic helm. Minister of Strategy and Finance Choi Kyung-hwan is all but certain to leave as soon as the National Assembly passes next year's government budget later this month, to run in parliamentary elections next April.
Whoever becomes finance minister may not be able to exert as much influence as Choi, who has been President Park Geun-hye's economic czar for the past 18 months, economic watchers say, citing the possible lack of charisma in Choi's successor and Park's waning power.
Since taking office in July 2014, Choi has poured more than 70 trillion won ($68 billion) into successive stimulus packages, but his successor could no longer resort to free spending and a near-zero interest rate to bolster an economy reeling from rapid increases in household debts and marginal businesses. The whole economic picture could change depending on whether and how Choi's successor controls the economy.
If Park drags her feet in naming her new economic czar, the vacuum in economic leadership will appear even bigger. For example, the policy package to reduce household debt, scheduled to be announced this month, may be put off to next year. Financial regulators and creditor banks may also postpone announcing their plans to restructure the ailing subsidiaries of family-controlled conglomerates.
The possible delay in appointing the next top economic policymaker, or naming a less influential person than the incumbent, comes at a difficult time, considering various economic events abroad, each of which could change the global economic balance of power.
A case in point was the IMF's decision on Monday to include the Chinese yuan in its currency basket _ in addition to the U.S. dollar, euro, yen and British pound _ of special drawing rights. The move, which will make the Chinese currency one of the five key currencies, could lead to the realignment of global financial markets, shaking domestic markets, too.
The European Central Bank's meeting on Thursday to discuss additional quantitative easing and the U.S. Fed's probable interest rate hike are also expected to have a huge effect on the Korean economy. Also noteworthy is an OPEC meeting on Friday because of the possibility that Saudi Arabia may cut production.
Most economic players here say they are experiencing difficulties even more severe than those during the 1997 Asian currency crisis. Against this backdrop, Choi, a politician-turned-economic chief, is returning to politics leaving a feeble economy and huge debts behind. Which explains why Park's critics are stressing the need for a far better choice next time around.