NEW DELHI -- Han Duck Soo, South Korea's deputy prime minister and minister of finance and economy, has unleashed a perfect storm of destructive policy proposals that may ensure that his country's economy remains stuck in under-performance mode. His declarations reveal him to be an inept custodian of the areas of his ministerial brief. It is bad enough that such incompetence should embarrass the ruling Uri Party, but implementation of these policies would seriously damage the South Korean economy.
On the one hand, he has asserted his opposition to credit-tightening measures. This flies in the face of the damaging distortions in the economy caused by low interest rates that include property and stock market bubbles. His constant, and ill-advised, comments are also widely interpreted to be undermining the independence of the Bank of Korea (BOK) by weakening its voice.
Happily, the BOK ignored Han and raised its call-rate target by a quarter-percentage point in response to rate hikes by the U.S. central bank and rising real-estate prices. The BOK had kept its call rate that dictates short-term lending rates between banks at a record low of 3.25 percent for 10 months in a vain attempt to spark an economic recovery.