Exports are at record highs and the stock market is approaching 5,000 points. At the same time, warning lights are flashing: a weaker won, renewed pressure on home prices and worsening youth employment. Some see the moment as an opening for a major shift; others warn of an economy cooling toward stagnation. In truth, opportunity and risk are advancing together — and that is the most difficult phase of all.
The real challenge is no longer what to do, but how fast, in what order and by what method. Yet policy discussions still cling to a familiar sequence: stabilize first, secure growth engines next, then pursue structural reform. That linear roadmap no longer just simplifies reality; it distorts it.
Such sequencing assumes a stable external environment, sufficient domestic trust and enough growth momentum to buy time. South Korea has lost all three. Globally, technology, security, energy and currencies are now entangled in constant competition, where delayed decisions can create years-long gaps. At home, widening divides in assets, income and generations are eroding social trust. Growth potential remains, but the room to postpone action under the excuse of “proper sequencing” has disappeared.
In this context, saying “stability this year, takeoff next year, reform after that” is not a strategy. It sounds like postponement — and voters and markets no longer trust it.
South Korea is not facing separate problems, but a compound crisis in which multiple risks move simultaneously. The country still needs to grow while already carrying the structural burdens of an advanced economy. Catch-up growth tasks and advanced-economy constraints are arriving at the same time.
The exchange rate is not merely a foreign-exchange issue. It feeds inflation, raises household burdens, weakens consumption and shapes corporate investment decisions. Treating currency stability as a stand-alone task is unrealistic. Housing is no different. It is tied not only to assets, but also to labor mobility, youth employment, birth rates and demographics. Push housing off as a later “structural reform,” and youth and labor policies fail in practice.
The same logic applies to AI and advanced industries. Technology cannot leap ahead while power grids, data infrastructure, permits and regulation remain bottlenecks. Talking about a technological takeoff while delaying structural change misreads the problem.
These challenges are already moving together. Only policy remains trapped in an outdated timetable.
What South Korea needs is not a more detailed timeline, but a package strategy that runs in parallel — one in which stability, takeoff and structural change reinforce one another.
The objective is not to solve everything by 2026. It is to convince the public and markets that the country has entered a credible, irreversible path. Direction matters more than completion.
Stability remains the starting point, but it can no longer be treated as a waiting phase. Uncertainty around exchange rates, prices, housing and finance must be reduced simultaneously. That requires more than technical adjustments; it demands a clear collective signal. The government, the central bank and public pension funds must clarify their roles and deliver a consistent message that these risks will not be neglected.
The same is true for takeoff. Policy documents are filled with references to AI and advanced industries, but the issue is not technology itself — it is the conditions that allow it to function. Without addressing power supply, data access, permits, regulation and talent incentives together, “takeoff” remains a slogan. It is not a future phase; it is a present challenge that cannot begin without changing today’s structures.
Structural change, meanwhile, is the hardest to postpone. Youth employment, labor mobility, regional gaps and demographic pressures are already unfolding. If direction and principles are not presented now, policy credibility will erode quickly. The task is not to overhaul every system immediately, but to lock in an unmistakable, irreversible direction.
This is where governance becomes decisive.
A package strategy that advances stability, takeoff and structural change simultaneously cannot be executed by any single ministry. It is not just a finance issue, nor can it be neatly divided among industry, land, labor or science ministries. With exchange rates and fiscal policy, industry and power, housing and jobs, technology and regulation all intertwined, coordination must run through the entire government — not as a collection of siloed policies.
That makes the role of the Blue House — a national control tower centered on the president — critical. Setting priorities, resolving interagency conflicts and tying short-term stability to medium- and long-term transition fall squarely within presidential authority and responsibility. This is a test of governance, not paperwork.
It is also where presidential leadership is judged most coldly. Leadership is revealed not by rhetoric, but by whether ministries move together, policy direction remains consistent and people feel change. Success restores trust quickly; failure leaves little room for excuses.
South Korea’s economy is now at that test. If the president cannot take direct responsibility and bind the government together at a moment when stability, takeoff and structural change cannot be separated, even the most carefully designed policies will struggle to work.
One more reality must be confronted: the nationwide local elections scheduled for June. They risk becoming a stronger variable than any economic policy now under discussion. The problem is not elections themselves, but the gravitational pull toward populism. Elections compress policy into short-term results and defer painful decisions.
As campaigns near, consistency weakens — especially on sensitive issues such as exchange rates, housing, fees and fiscal policy.
Officials begin to say “now is not the time.” Direction is verbally maintained, but execution slows. The public notices. A package strategy — which requires firmness, consistency and shared burden — is especially vulnerable. If momentum falters during the campaign, the damage will extend beyond policy failure to a deeper loss of trust.
The question, then, is how to sustain a firm, consistent package strategy amid political pressure.
First, policy must be elevated from campaign pledges to governing principles. Without a clear separation, policy will wobble. Stability, takeoff and structural change must be framed not as promises to specific groups, but as operating principles tied to national survival — and articulated even more clearly during the campaign.
Second, the direction and baseline timeline should be institutionalized as much as possible. Laws, systems, medium-term plans and independent bodies can buffer policy from the electoral calendar. Not everything can be legislated, but the core direction must be embedded so it cannot swing entirely with politics.
Third, results must be shown as in progress, not deferred to the future. Elections dislike uncertainty, but public anxiety grows when nothing seems to be happening. Visible shifts within 2026 are essential to demonstrate that the path is already changing.
Finally, presidential leadership becomes even more crucial. As elections approach, ministries hesitate and risk avoidance grows. Only the president can hold the policy line. Without clear priorities and non-negotiable principles set from the top, the package strategy will unravel.
Elections are unavoidable. Whether they consume policy is a matter of governance. In South Korea’s current situation, delaying hard decisions because of electoral pressure is not a political choice — it is a national risk.
Calling for stability, takeoff and structural change at once does not mean ignoring elections. It means acknowledging that reality and still setting minimum governing standards that must not waver. Elections pass. Economic direction shapes the years that follow.
South Korea’s economy is again at a crossroads: whether policy is pulled by the magnet of politics, or whether it holds its course above it. The consequences will be felt directly in people’s lives/
The author is an editorial writer for the Aju Business Daily.
About the author
▷Former deputy business editor and Tokyo correspondent at JoongAng Ilbo ▷Former visiting professor at Seoul National University’s College of Engineering ▷Former chair professor of technology management at Hanyang University ▷Former head of Gyeonggi Science & Technology Promotion Agency ▷Currently a special professor at Gwangju Institute of Science and Technology’s AI Policy and Strategy Graduate School and a visiting professor at Gachon University ▷Currently editorial writer at Ajou Economy
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
Kwak Jae-won 논설위원장 kjwon54@gmail.com
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