South Korea's top policy adviser, Kim Yong-beom, has resigned from his post as the administration struggles to recover from sliding approval ratings. His tenure was marked by controversial support for single-stock leveraged ETFs and a proposal for universal cash handouts funded by tax windfalls from the artificial intelligence boom.
According to the presidential office, President Lee Jae-myung accepted Kim's resignation as chief of staff for policy on Tuesday. The administration has yet to disclose the reason for his departure or name a successor to this crucial role, which oversees the government's economic and domestic policy agenda.
The exit of Kim comes just days after Lee's first major cabinet reshuffle since taking office in June 2025. While a wave of ministers from the economy, land, justice, and defense ministries were replaced in that sudden overhaul 鈥?a move that caught some off guard 鈥?Kim had initially kept his position.
"The weekend cabinet reshuffle failed to turn things around," said Park Chang-hwan, a political science professor at Jangan University. "It would have been more effective if all the dismissals had been announced at once," Professor Park added.
The personnel changes come as the Lee administration prepares to unveil its 2027 budget, reigniting focus on whether stronger economic growth and fiscal support can translate into broader household gains. The reshuffle follows Lee's approval rating sliding to a low of 42% in the latest Gallup Korea poll.
Among those with negative views of Lee's performance, housing policy emerged as a primary source of discontent, highlighting the political cost of the government's failure to keep home prices within reach for young families. However, it remains unclear whether Kim's resignation can ease growing public frustration over rising housing costs.
Kim was a key architect of several flagship policy initiatives but drew criticism for the rapid introduction of single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix. Launched in May to channel retail investment into the domestic stock market, these products subsequently triggered severe market volatility, prompting regulators to strengthen investor protection measures. His proposal for "universal dividends" using excess tax revenue from the AI boom also ignited intense public debate and fueled speculation about how the government might deploy this windfall. Kim stated the idea involved distributing surplus tax income, not tapping into corporate profits.
Kim was also the driving force behind the government's massive semiconductor investment plans, designed to capitalize on surging chip demand. The Lee administration is coordinating at least 1,350 trillion won ($880 billion) in corporate investment to build chip plants and data centers nationwide, positioning South Korea as a key player in the AI revolution.
His departure leaves a significant void in Lee's economic and policy team at a time when the government is striving to convert the semiconductor boom into benefits for a broader swath of households. The Bank of Korea projects the economy will grow 3.3% this year, fueled by robust global chip demand boosting trade, corporate earnings, and government revenue. Yet this headline figure masks persistent underlying weaknesses within the economy.
As the working-age population shrinks and productivity stagnates, South Korea's potential growth rate continues to decline. Meanwhile, job growth remains sluggish, and the benefits of the chip boom are still largely concentrated among a relatively small number of companies and workers.