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Cablegate: Blue House Reshuffles Cabinet

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ZNR UUUUU ZZH
R 030903Z JUL 06
FM AMEMBASSY SEOUL
TO RUEHC/SECSTATE WASHDC 8800
INFO RUEHBJ/AMEMBASSY BEIJING 0894
RUEHKO/AMEMBASSY TOKYO 0963
RHHMUNA/CDR USPACOM HONOLULU HI
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RHMFIUU/COMUSKOREA J2 SEOUL KOR
RHMFIUU/COMUSKOREA J5 SEOUL KOR
RHMFIUU/COMUSKOREA SCJS SEOUL KOR
RHEHNSC/NSC WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC//OSD/ISA/EAP//

UNCLAS SEOUL 002201

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KS
SUBJECT: BLUE HOUSE RESHUFFLES CABINET

SUMMARY
-------

1. (SBU) The Blue House announced today a partial cabinet
reshuffle, placing in the Ministry of Finance and Economy and
the Ministry of Education and Human Resources two of
President Roh Moo-hyun's most trusted advisors, Kwon O-kyu
and Kim Byong-joon, respectively. Kwon, who replaces Han
Duck-soo, in the midst of the KORUS FTA negotiations, is
considered to be a strong supporter of the FTA. Critics,
however, are discontent with Kim's nomination. Kim drafted
the controversial real estate tax policy, when he was
National Policy Chief, which certain Uri legislators argue
led to the ruling party's defeat in the recent regional
elections. Critics also see both Kwon and Kim's nomination
as Roh continuing to ignore the desires of the public and
placing his closest aides in senior positions. END SUMMARY.

2. (SBU) The five new cabinet members are:

-- Kwon O-kyu, Deputy Prime Minister and Minister of Finance
and Economy (vice Han Duck-soo)

-- Kim Byong-joon, Deputy Prime Minister and Minister of
Education and Human Resources Development (vice Kim Jin-pyo)

-- Byeon Yang-kyoon, Chief Secretary for National Planning,
Blue House (vice Kwon O-kyu)

-- Chang Byung-wan, Minister of Planning and Budget (vice
Byeon Yang-kyoon)

-- Jun Gun-pyo, Commissioner National Tax Service (vice Lee
Joo-sung)

THE NEW FINANCE AND ECONOMY MINISTER AND THE FTA
--------------------------------------------- ---

3. (SBU) Kwon O-Kyu was named Deputy Prime Minister and
Minister of Finance and Economy (MOFE), replacing Han
Duck-soo. The 54-year-old Kwon, who is currently President
Roh Moo-hyun's Policy Planning Chief, is a strong supporter
of a KORUS FTA (NOTE: He was the former chief KORUS FTA
coordinator at the Blue House. END NOTE.) He is expected to
bring a positive impact on the negotiations. As Kwon is
close to Roh, he may have greater influence than outgoing
MOFE Minister Han Duck-soo, who was considered more of a
technocrat.

4. (SBU) Kwon is reputed to have impressed Roh through his
ability to come up with answers and acceptable courses of
action in difficult situations. Critics, however, believe
that Kwon may have difficulty in controlling the more
traditional and conservative bureaucrats in the Ministry,
many of whom do not support some of Roh's economic policies.
Outgoing Minister Han was seen as a politically-neutral
expert, who could persuade Roh against what critics call his
more reckless economic policies. Some critics also fear that
with a "confidant" at the helm, MOFE will come under fire
from Roh's critics for "forcing Roh's policies down the
nation's throat" rather than being the "corrective" force.

5. (SBU) Bio data: Kwon is the current Policy Planning Chief
in the Blue House. Previously, he served as Secretary for
National Policy; Deputy Minister of Finance and Economy;
Director General for Economic Policy of MOFE; and as
Ambassador to the Korean Mission at the OECD. Kwon earned
his B.A. in economics from Seoul National University and his
Ph.D. in economics from ChungAng University.

EDUCATION MINISTER
------------------

6. (SBU) Kim Byong-joon was named Deputy Prime Minister and
Minister of Education and Human Resources Development,
replacing Kim Jin-pyo. (NOTE: Kim Jin-pyo stepped down as
the Education Minister over a series of policy failures and a
massive outbreak of food poisoning at local schools, causing
over 3,000 students to become sick. END NOTE.) Kim
Byong-joon, who had previously served under Roh as Policy
Planning Chief, is also considered to be one of Roh's closest
confidants.

7. (SBU) Critics, however, are discontent with Kim's
nomination. Kim drafted the controversial real estate tax
policy when he was National Policy Chief and made
inflammatory statements like "the real tax bomb is yet to
come." Kim's nomination is particularly unpopular among Uri
legislators who argue that is was Kim's policies that led to
the ruling party's defeat in the recent regional elections.

8. (SBU) Bio data: Kim has served as National Policy Chief
for the Blue House and as Chairman of the Government
Innovation and Decentralization Committee. Kim earned his
B.A. and Ph.D. in political science from Youngnam University
and the University of Delaware, respectively.

THE NEW BLUE HOUSE POLICY PLANNING CHIEF
----------------------------------------

9. (SBU) Minister of Planning and Budget Byeon Yang-kyoon
will serve as the new Policy Planning Chief in the Blue
House, replacing Kwon O-kyu. Byeon is regarded as an
experienced economic bureaucrat based on his experience
within the Ministry of Planning and Budget. As Minister and
Vice Minister, Byeon is credited with leading the nation's
financial reforms and introducing a new financial management
system.

OTHER POSTS
-----------

10. (SBU) Chang Byung-wan will serve as the new Minister of
Planning and Budget, replacing his boss Byeon Yang-kyoon.
Chang is currently serving as the Vice Minister for Planning
and Budget.

11. (SBU) Jun Gun-pyo, Deputy Commissioner of the National
Tax Service (NTS) will become the new NTS Commissioner. He
replaces his boss, Lee Ju-sung, who resigned to give his
subordinates the "opportunity" to lead the NTS. Critics,
however, believe that Lee resigned over a real-estate
speculation scandal involving his wife.
VERSHBOW

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