NEW UNDP CANDIDATE CHUNG BANKS ON NORTH KOREA

C O N F I D E N T I A L SEOUL 003122 SIPDIS SIPDIS E.O. 12958: DECL: 12/10/2014 TAGS: KN KS PGOV PREL PINR SUBJECT: NEW UNDP CANDIDATE CHUNG BANKS ON NORTH KOREA CREDENTIALS REF: A. 2005 SEOUL 4593 ¶B. 2004 SEOUL 4288 Classified By: POL Joseph Y. Yun. Reasons 1.4 (b,d). ¶1. (C) Summary: On October 15, the progressive United New Democratic Party (UNDP) announced that former Unification Minister Chung Dong-young is the party's candidate for the December 19 presidential election. Chung won with a comfortable 43.8 percent of all physical, mobile phone, and opinion poll votes. Rivals Sohn Hak-kyu and Lee Hae-chan trailed with 34 percent and 22.2 percent, respectively. Voter turnout in the final set of booth elections on October 14 averaged a mere 14.4 percent, underscoring the public's ambivalence about the UNDP. ¶2. (C) Chung, who made a trip to Kaesong on October 17, has made North Korea policy the cornerstone of his bid for the presidency, but he also supports economic initiatives to "grow the middle class." Chung still faces an uphill battle to sell himself to the Korean public first as the progressive standard bearer and then as a viable alternative to conservative candidate Lee Myung-bak. Chung's stance on North Korea policy seems to be more liberal than the majority of South Koreans who are overwhelmingly concerned about the economy. Chung plans to continue many of the Roh administration's policies on economic reform and education. His past comments to Embassy officials suggest that he also would be likely to continue Roh's policy on North Korea. End Summary. -------------- Man of the People -------------- ¶3. (SBU) Already Chung has sought to cast himself as the candidate who understands the average Korean. Chung Dong-young was born in Sunchang County, North Jeolla on July 27, 1953, the day the Armistice was signed. He was the fifth of nine brothers, but his four older brothers were killed by North Korean sympathizers during the war. In a story that echoes Lee Myung-bak's "rags-to-riches" story, Chung spent his younger years helping his mother in her small tailor shop in Dongdaemun Market in Seoul. Chung went on to major in Korean history at Seoul National University, later earning a master's degree at University of Wales in 1987. In 1973 Chung was jailed for his involvement with the Alliance of Democratic Youth and Students. He met his current chief policy advisor, Kyung Hee University professor Kwon Manhak in the police station, and the two have been close friends ever since. ¶4. (SBU) Chung started his career as a reporter for MBC in 1978 and attributes his time as a journalist during the turbulent 1980's -- and his front row seat covering the May 18, 1980 Gwangju massacre -- for reinforcing his commitment to progressive political goals. In 1996, Chung left journalism and won a seat in the National Assembly. In 2000, he became spokesman for the progressive Millennium Democratic Party, and in 2002 lost in the party's presidential primary to Roh Moo-hyun. Chung went on to become Roh's Unification Minister in 2004, but left in December 2005 to prepare for another run at the presidency. In February 2006, he again took leadership on the Uri Party only to resign that post in May to take responsibility for the party's resounding defeat in regional elections. -------------- North Korea: Campaign Cornerstone -------------- ¶5. (SBU) As Unification Minister, Chung spearheaded construction of the Kaesong Industrial Complex, hence his self-awarded nickname "Kaesong Dong-young." During his tenure in the Unification Ministry Chung met with Kim Jong-il. Chung is branding himself the "reunification presidential candidate," explicitly naming eventual reunification as a goal of his administration, following resolution of nuclear programs and finalization of a peace treaty. If elected, he has pledged to begin the disarmament process, develop a triangular economic region connecting Kaesong with Haeju in the North and Incheon in the South, and open a series of cross-border railways. Chung also wants to make inter-Korean summit talks a regular occurrence. -------------- Peace is Money -------------- ¶6. (SBU) Chung has said he envisions a common economic community on the peninsula by 2020 in which people, goods and capital can move freely between the two Koreas. He reportedly believes that once a peace agreement is signed, more South Korean and multinational firms will invest in Kaesong and in areas throughout North Korea. ¶7. (SBU) Chung's economic plan is to help the economy expand 6 percent each year and create a 40-million-strong middle class. To do this, Chung promised to create 2.5 million jobs over the next five years. He also calls for lower oil rates and lower credit card commission fees to help small businesses cut costs. While Lee wants to cut taxes, Chung's camp says how the government uses taxes is more important than cutting or increasing taxes. In fact, he plans to increase taxes by introducing a transaction tax for financial derivatives, arguing that stock-rich people should pay more. -------------- Rancorous Relations with Roh -------------- ¶8. (C) Chung was a close confidante to Roh and helped create the Uri Party which Chung headed after its founding in 2003. Chung angered Roh by leaving the Uri Party for the new progressive coalition in early 2007 despite Roh's efforts to hold the Uri Party together. This betrayal combined with Chung's harsh statements designed to distance himself from Roh prompted the president's decision to back Lee Hae-chan's failed candidacy. The Blue House's public reaction to Chung's win was muted, although Roh reportedly told Chung in a phone call that he should mend ties with those he hut during the campaign. Meanwhile, Lee Myung-bak supporters have derided Chung both for being Roh's patsy and for betraying Roh. -------------- Left of Liberal or More of the Same? -------------- ¶9. (C) Chung, who some opinion-watchers have called naive on North Korea, has called on the U.S. publicly and privately to support South Korea's engagement strategy with the North. In past conversations with the Embassy, Chung seemed optimistic that Kim Jong-il had made a strategic decision to denuclearize. Chung said Kim told him during their meeting in 2005 that denuclearization was a legacy Kim Il Sung tasked his son to complete. Nevertheless, while Unification Minister, Chung told the Embassy that Korea's economic development depended on the U.S.-Korea alliance, which he called the very foundation of Korea's democracy and market economy (reftel a). In 2004 Chung also told the Embassy that Korea would continue to need the alliance with the United States after reunification. In particular, the growth of economic and political relations with China underscored the importance of continuing the alliance (reftel b). -------------- Moon on the Horizon -------------- ¶10. (C) Chung now finds himself the sole candidate of a dysfunctional UNDP. The party succeeded in its goal to have open primaries but overestimated public interest. Even the announcement of Chung's win came after the election results were known, diminishing any excitement the announcement itself might have generated. Press reports anticipate an alliance of the three liberal candidates - Chung, independent Moon Kyk-hyun, and Democratic Party candidate Rhee In-je -- by mid-November. Rhee, whose support rates have averaged between 2 and 3 percent, is unlikely to emerge as the single liberal candidate, but the race with Moon will be closer. In a poll released by Munwha Ilbo on October 16, Chung's support was still only at 15.7 percent. One election watcher told Poloff that Chung needs to get above 20 percent in upcoming opinion polls to have a chance, a feat this contact thought would be difficult to achieve. Anything less than 20 percent could leave the door open for Moon to win the liberal candidacy. -------------- Comment -------------- ¶10. (C) Chung Dong-young faces significant challenges in winning the December election. With only 8 weeks until election day, he first has to win enough public support to become the sole liberal contender and then find a way to erode Lee Myung-bak's sizeable support rating -- still hovering around 50 percent in all polls. In the past, Chung has proven to be an adept political operator, surviving the Uri Party break up, past election failures, and his rift with Roh, an aptitude that suggests he will work to bring his policies more in line with South Korean public opinion. However, the disinterest in the UNDP primary does not bode well -- even if Chung can unify the liberal camp, he may fail to motivate die-hard liberals to get out and vote. VERSHBOW