President Lee Jae-myung on Monday made the surprise appointment of Han Sung-sook, Minister of SMEs and Startups, as the successor to Prime Minister Kim Min-seok, who is expected to run for the Democratic Party leadership. The Presidential Office described Han, a former information technology executive, as "the right person to complete the great artificial intelligence (AI) transformation and lead growth for all of Korea." The explanation clearly reflects the direction of the Lee government's second-year state administration: industrial innovation and stabilization of the people's livelihood and economy. On Tuesday, a press conference marking the first anniversary of Lee's inauguration will be held to present his second-year vision under the slogan "Irreplaceable Korea." With the president recently calling at a senior secretaries' meeting to "make all-out efforts to double the speed of state affairs," a swift follow-up Cabinet reshuffle and a strong policy drive are anticipated.
The government, now entering its second year, faces a pile of difficult and urgent tasks. The waves of the "three highs"—high exchange rates, high prices, and high interest rates—are already crashing hard. The won-dollar exchange rate at one point broke past 1,560 won, soaring to its highest level since March 2009. Consumer prices have also risen into the 3 percent range, heightening pressure for interest rate increases. Yet the warmth of semiconductor-driven growth has failed to reach the bruised livelihoods of the public and other industries, deepening "K-shaped polarization" by the day. Adding to this, labor unions' demands for "N percent performance pay," coupled with the implementation of the Yellow Envelope Act, are signaling a record-level summer labor offensive this year. U.S. trade and security pressure, which remains unresolved despite last year's tariff negotiations, along with instability in the property market and housing, are also problems.
Over the past year, the government and ruling party have pressed forward relentlessly. Without opposition checks, they pushed through prosecution, judicial, and media reform, revisions to the Commercial Act, legislation of the Yellow Envelope Act, and property regulations. Luck was not bad, either. The semiconductor "super cycle" arrived just in time, supporting a stock market boom and economic recovery and serving as a strong tailwind for the administration's momentum. The real test begins now. The June 3 local elections confirmed both public support for the current government and wariness toward its one-sided dominance. Economic conditions have also become more challenging amid shifts in global monetary policy and the fallout of war. To overcome the compound crisis masked by the semiconductor illusion, the ruling and opposition parties must join forces and accelerate stabilization of the people's livelihood and economic reform. We hope President Lee will, through unity politics that embraces everyone, catch both rabbits—livelihood and innovation—in his second year in office.
