South Korean President Lee Myung-bak yesterday replaced his finance minister and North Korea policymaker, signaling a new drive to combat the economic crisis and an apparent refusal to yield to the North’s threats.
Kang Man-soo, who came in for severe media criticism for his handling of the economic downturn, will be replaced by Yoon Jeung-hyun, the president’s spokesman said.
Yoon is a former chief of the decision-making Financial Supervisory Committee and of the watchdog Financial Supervisory Service.
“The government expects his nomination and appointment will bring about confidence in the market that will help us get through this economic crisis,” the spokesman said.
South Korean Unification Minister Kim Ha-joong will be succeeded by Hyun In-taek, an academic who helped draft Lee’s policy towards Pyongyang, which links major economic aid to progress on denuclearization.
The policy has enraged the communist North, which has cut off dialogue and imposed tight border controls. The South’s armed forces are on top alert after the North’s military on Saturday threatened “all-out confrontation” with Seoul.
Lee’s office in a statement called Hyun “a reunification and security expert” well versed in North Korean affairs and national defense.
Analysts said Hyun’s appointment indicates the conservative president will maintain his firm policy towards Pyongyang, which contrasts with a decade-long “sunshine” engagement policy under Lee’s liberal predecessors.
“Hyun is a key architect of President Lee’s North Korea policy, which is denounced by Pyongyang as being confrontational,” said Park Kie-duck, a senior member of the Sejong Institute think-tank.
“Hyun’s appointment sends a signal that President Lee will hold on to his current principled policy towards North Korea consistently. There will be no quick attempts to engage the North,” Park said.
Lee, styling himself the “economy first” president, won power with a record victory margin. But after almost 11 months in office, his approval rating has slumped as the export-driven economy teeters closer to recession.
Kang was under fire for public utterances which critics said weakened market confidence and for alleged inconsistency. Initially, he encouraged a weaker won to promote exports, until the currency nosedived against the dollar and authorities were forced to try to prop it up.
The central bank’s official growth forecast for this year is 2 percent. The state-run Korea Development Institute sees a high possibility of the first recession in over a decade, as domestic demand and exports fall sharply.
Park said the president had long ignored demands to replace Kang, one of his closest confidants.
“But he could no longer stick it out politically,” Park said.
The president also replaced two ministerial-level officials — the chief of staff for the prime minister and the head of the newly created regulatory body, the Financial Services Commission (FSC).
Kwon Tae-shin, a career government administrator, will become the prime minister’s chief of staff. Chin Dong-soo, president of the state-run Export-Import Bank of Korea, is to be the new head of the FSC.