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Cablegate: Korea's Maritime Ministry Gets Sinking Feeling

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FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8214
INFO RUEHBJ/AMEMBASSY BEIJING 3760
RUEHKO/AMEMBASSY TOKYO 3896
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RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/EAP

UNCLAS SEOUL 000163

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E.O. 12958: N/A
TAGS: PREL PREF KN KS EIAID
SUBJECT: KOREA'S MARITIME MINISTRY GETS SINKING FEELING

This message is from the American Presence Post (APP) in Busan,
Korea.

1. (SBU) SUMMARY: Although Lee Myung-bak's transition team is
garnering headlines in Seoul for its proposed merger of the Ministry
of Unification under the Ministry of Foreign Affairs and Trade, it
is the Ministry of Maritime Affairs and Fisheries (MOMAF) that is
the hot topic in Busan. Following the recent announcement by
President-elect Lee Myung-bak's transition team that MOMAF would be
broken up and absorbed into other ministries, Busan residents are
divided in their response to the news. As vocal protestors shaved
their heads in front of the National Assembly and captured the
media's attention, other, quieter groups in Busan welcomed the
change and cast this as part of the natural progression with any new
administration. Most of our contacts believe this change will not
affect their interests, even though they are linked to the maritime
industry in some way. Yet, if the vocal minority is able to
maintain its momentum long enough, there is a good chance that this
issue will carry over until the parliamentary elections on April 9.
For now, the biggest potential winner is the municipal government
that stands to gain more autonomy with MOMAF's dissolution, while
the biggest losers appear to be the MOMAF employees that stand to
lose their jobs. END SUMMARY.

MOMAF'S ORIGIN
--------------

2. (SBU) Korea's largest port is located in Busan on the southeast
coast of the Peninsula. In addition to being the largest port in
Korea and the fifth largest in the world, the world's top seven ship
building companies are also located in and around Busan. In the
words of Busan's Mayor Hur, Busan is Korea's capital for maritime
issues. Recognizing the economic importance of the maritime
industry to Korea, the central government maintains the largest
regional office of MOMAF in Busan with a staff of over 250. The
ROKG upgraded MOMAF from an independent administration to a
full-fledged ministry in 1996 during the presidency of Kim
Young-sam, a Busan native. At the Ministry's formation, functions
were taken away from the Ministry of the Environment and the
Ministry of Commerce and Industry. The creation of MOMAF was a
recognition that maritime competitiveness was one key to becoming a
world power, drawing from the history of the U.S., England, and
Japan.

MOMAF'S EVER-ENLARGING PORTFOLIO
--------------------------------

3. (SBU) Today, MOMAF has extended its reach into the shipping
industry, fishing industry, and even national efforts to attract
high-profile events to Korea. MOMAF was instrumental in helping the
fellow port city of Yeosu capture the bid to host the 2012 World
Expo, an event expected to boost tourism and development in the
southern coastal area through investment in infrastructure and
facilities. MOMAF has ventured into the geo-political realm as it
worked on the Dokdo-Takeshima islet territory dispute with Japan.
MOMAF is also heavily involved in lobbying in support of the name
'East Sea' rather than the internationally accepted 'Sea of Japan'
when referring to the body of water off the east-coast of the Korean
Peninsula.

NEW MINISTRY STRUCTURE
----------------------

4. (SBU) On January 16, the Lee Myung-bak transition team announced
its proposal to restructure and in some cases dissolve several
government ministries. While the proposal to bring the Ministry of
Unification (MOU) under the supervision of the Ministry of Foreign
Affairs and Trade (MOFAT) is the move that is surely the most
controversial, the plan to break MOMAF into three parts is of great
interest (and angst) to the citizens of Busan. Under the current
plan, MOMAF's duties will be relegated to the Ministry of
Transportation and Construction and the Ministry of Agriculture and
Forestry. The Ministry of the Environment will also take a small
piece. In a meeting with Principal Officer, MOMAF's Acting
Commissioner in Busan, Kang Bum-gou, shared the most recent draft of
the restructuring plan (Note: Kang was hurriedly assigned to the
Busan office in the days following the December 19 election. The
previous Commissioner in Busan was detailed to work with on the
Transition Committee's Second Subcommittee for Economic Affairs in
the hopes of saving MOMAF from breakup. END NOTE).

5. (SBU) Under the current plan, a new organization is to be
created by the merger of the Agriculture and Forestry Ministry, the
MOMAF's fishing and fisheries affairs, and the Health and Welfare
Ministry's food-related sections. This will be called the Ministry
of Agriculture, Fisheries and Food. The Ministry of Construction
and Transportation will take over the MOMAF's marine transportation
and port policies and the Korea Forest Service; this agency will be
called the Ministry of Homeland and Maritime Affairs.

6. (SBU) Within the new Ministry of Homeland and Maritime Affairs,
there will be nine directors heading up the following divisions:
Policy Management and Public Relations; Territorial and Ocean
Policy; Urban and Regional Policy; Housing Policy; Construction and
Investment Policy; Transport and Logistics Policy; Surface Transport
Policy; Maritime Transport Policy; and Aviation and Airport Policy.
In addition to concerns about being lost among these numerous
divisions, there is also a good likelihood that the ongoing housing
policy debate could elevate the importance of the Housing Policy
division within this Ministry to the detriment of other
less-sensitive divisions and issues. Busan University economics
professor Lim Jung-duk also noted that money equals power in the
central government. Even if the MOMAF divisions are able to
maintain some semblance of their former selves inside the new
ministry, they will no longer have the discretionary budgets they
enjoyed as a standalone ministry. Even if MOMAF was a "second-tier"
ministry before, it had the luxury of its own budget and the
autonomy that comes with it.

POLITICAL FORCES
----------------

7. (SBU) In addition to MOMAF dispatching their commissioner from
Busan to work on a transition committee, Busan residents have
another insider working on this issue. Vice Chairman of the
Presidential Transition Team, Kim Hyung-oh, is a four-term lawmaker
representing a district in Busan. Despite the location of his
constituency, Kim has taken a positive tone in his public statements
about the restructuring while softly criticizing those opposed to
the move. In response to a recent newspaper ad from a group of 70
NGO and civic groups in Busan that pleaded for preserving MOMAF, Kim
said "It's obvious why previous governments were unable to
restructure government agencies." Kim was also quoted as saying
"Under the current structure, the fishery function has been ignored
so it will be better if MOMAF is restructured into a stronger
organization that better supports the maritime functions."

8. (SBU) Despite the vocal protests by some, including a group of
500 protestors who shaved their heads in protest in front of the
National Assembly building on January 22, some groups in Busan see a
positive side to the restructuring. The Busan Port Authority (BPA)
confided that they believe the dissolution of MOMAF is likely to
provide local governments with more autonomy and power. This is
welcome news to the BPA, which has grand plans to convert a large
portion of their North Port from a traditional ship yard into a
tourist attraction complete with sand beaches and four-star hotels.
The plan was derailed early in 2007 following a visit from then
presidential candidate Lee Myung-bak. Lee expressed his pessimism
with the notion of a tourist space and turned the BPA around to
consider a new commercial space instead. Although the BPA complied
and drew up new plans, they kept the old ones in a drawer and hope
to bring them back to life in the near future.

9. (SBU) Another rumor is that the fishing side of MOMAF wanted to
get out from under the shadow of bigger maritime issues such as
shipping and territory. Proponents of the fishing industry
supposedly supported the dissolution of MOMAF and may have provided
President-elect Lee with enough ammunition to make the decision to
deep-six the Ministry. Jang Cheol-soon, President of a large
technology company that supplies the ship-building industry, agrees
that it is probably better for both parties if the fishing and ocean
contingents part company. According to Jang, MOMAF spent the first
nine of its eleven years focusing solely on the fishing industry to
the detriment of the broader ocean-related issues.

IMPLICATIONS FOR APRIL
----------------------

10. (SBU) Undoubtedly, National Assemblyman Kim Hyung-oh and the
other 16 representatives from Busan are conscious of the upcoming
April 9 elections and are careful to strike a balance between
working with the incoming administration and maintaining their own
seats in the parliament. Although this theory is called into
question for higher-profile players like Kim who may be granted a
position within the administration and therefore less concerned
about his constituents in Busan. In addition to the current group
of NGOs and civic groups who oppose MOMAF's dissolution, there is
the potential that another group will arise with even more serious
concerns. MOMAF's Acting Commissioner Kang said that he expends a
lot of energy trying to keep his 250 employees engaged and thinking
positive. Kang said that they all fear they may lose their jobs as
the Ministry is merged into others. As a senior officer within
MOMAF, Kang said he has more to fear than the lower-level employees
as there are likely to be less senior-level positions after the
restructuring.
COMMENT
-------

11. (SBU) Most people in Busan have little interest in the
structure of the central government and the titles assigned to the
government ministries. Although there is a lot of clamor in Busan
about the plan to restructure MOMAF, most experts expect the noise
to subside within weeks, not months. Some of the issues that MOMAF
has traditionally addressed may indeed decline in overall attention,
the economic aspects of the shipping industry and Busan's prominence
as a top world port should not be affected. Although the move to
place the MOU under the foreign ministry's care may be bargained
away in negotiations with the National Assembly, MOMAF appears
unlikely to survive the proposed cuts by the incoming
administration.

STANTON

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