(2nd LD) President sacks finance minister over economic crisis

(ATTN: RECASTS lead paras; RESTRUCTURES; UPDATES with response from political parties)
By Byun Duk-kun
SEOUL, Jan. 19 (Yonhap) -- President Lee Myung-bak, under public pressure, sacked
his finance and unification ministers Monday as part of a long-anticipated
government reorganization as he prepares to begin the second year of his
five-year term.
"The focus of the reshuffle has been to reorganize the government's economic team
that will carry out the most urgent, pressing task of reviving the country's
economy," Lee Dong-kwan, a spokesman for the presidential office Cheong Wa Dae,
told a press conference.
Finance minister Kang Man-soo will be replaced by Yoon Jeung-hyun, who served as
the head of the Financial Supervisory Committee and the Financial Supervisory
Service under the former Roh Moo-hyun government.
"The government expects Yoon's nomination and appointment will bring about
confidence in the market that will help us get through this economic crisis," the
spokesman added.
The embattled finance minister has been widely blamed for misguiding the country
into the ongoing financial crisis now hitting the rest of the world. His
successor, however, is expected to have very little, or limited, impact on to the
looming crisis that is threatening to push the country's economy into what the
government has called an "unprecedented recession."
Seoul has set up an emergency presidential committee which, according to the
presidential spokesman, will make most of the important economic decisions at
least for the next 12 months or until the country has cleared risks of a
recession.
Unification minister Kim Ha-joong, the country's point man on North Korea, will
also be replaced as ties deteriorated with Pyongyang, which on Saturday said its
armed forces would assume a posture of "all-out confrontation" with the South.
Kim, former ambassador to Beijing is to be replaced by Hyun In-taek, professor of
political science from Seoul's Korea University, the president's alma mater.
Despite the change, many observers believe Hyun's very appointment could trigger
a fresh round of verbal attacks from the communist nation, which has consistently
claimed that Seoul's Lee government wants confrontation, not reconciliation.
The spokesman for the presidential office on Monday noted the Korea University
professor played an important role in setting up one of the president's key North
Korea policies, dubbed Denuclearization, Openness, 3000.
The policy vows to help North Korea increase its per capita income to US$3,000
within 10 years if the communist nation completely abandons its nuclear
ambitions. The North has flatly rejected the proposal.
Seoul's main opposition Democratic Party blasted the shakeup as an attempt to
solidify the president's grip on the government by placing Lee's most loyal
followers in key posts.
"In short, it says the president will rule with an iron fist," party spokesman
Rep. Choi Jae-sung said, claiming most of the nominees in Monday's reshuffle were
picked not because they were the most fit for the job but because they come from
the same school or hometown as the president.
"It is a clear declaration of war against the people that says the government has
no interest in what the people want, and that it will run the government and the
nation in a way that best serves its own interest only in holding on to power,"
the opposition party spokesman said.
All nominees for the ministerial-level posts must undergo confirmation hearing at
the National Assembly, though the unicameral parliament cannot veto the
nominations.
Monday's reshuffle also included two other ministerial-level posts -- chief of
staff for prime minister and the head of the Financial Services Commission.
Kwon Tae-shin, a career government administrator, was promoted to the position of
prime minister's chief of staff while Chin Dong-soo, president of the state-run
Export-Import Bank of Korea, was tapped to head the Financial Services
Commission, according to the presidential spokesman.
Also to be replaced in the latest government shakeup are 15 vice
ministerial-level officials, including the chief presidential secretary for
economy, Bahk Byong-won, who recently underwent questioning by state inspectors
for possible involvement in suspected irregularities committed by his former
employer, Woori Financial Group.
Bahk is to be replaced by Yoon Jin-shik, president of the Korea Investment
Holdings Co. Ltd., Lee said.
The president was earlier expected to name nominees for five ministerial-level
posts, including a replacement for public administrations minister Won Sei-hoon,
who was tapped Sunday to become the head of the country's National Intelligence
Service.
"The nomination process for the public administrations minister has yet to be
finalized," Lee told the press conference, noting the process could be completed
within the next few days.
A future announcement will also include a replacement for the head of the
National Tax Service, he said.
Han Sang-ryule resigned last week as head of the tax agency after he came under
suspicion of bribery and faces an imminent investigation by the prosecution.
bdk@yna.co.kr
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