LEE GIVES CABINET A SHAKE, BRINGS IN NORTH KOREA

C O N F I D E N T I A L SEOUL 000105

SIPDIS

E.O. 12958: DECL: 01/21/2019
TAGS: PGOV PREL KS KN
SUBJECT: LEE GIVES CABINET A SHAKE, BRINGS IN NORTH KOREA
POLICY ARCHITECT

Classified By: POL M/C Joseph Y. Yun. Reasons 1.4(b/d)


1. (C) SUMMARY. ROK President Lee Myung-bak gave his
cabinet a makeover January 18 and 19, naming Yoon Jeung-hyun
his new Finance Minister (septel),Hyun In-taek Unification
Minister, and Won Sei-hoon National Intelligence Service
(NIS) Director. In naming close campaign advisor and
"Denuclearization, Opening 3000" architect Hyun as his
Unification Minister, Lee has probably picked a more
enthusiastic advocate for Blue House inter-Korean policy. A
primary task for Harvard-educated economist Han, on the other
hand, will be to win support for U.S. ratification of the
KORUS FTA, one of the Lee government's highest priorities.
The timing of the shakeup is significant as the Blue House
hopes its "119" (for January 19 and also the Korean emergency
phone number) shuffle focused on the economy will provoke
favorable discussions among families over the long Lunar New
Year weekend and build support for President Lee. End
summary.

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Hyun: Behind-the-Scenes Advisor to LMB
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2. (SBU) Korea University political science professor and
close advisor to President Lee since his days as a candidate
in early 2007, Unification Minister nominee Hyun In-taek
worked during the presidential campaign with Kim Tae-hyo
(current National Security Advisor) and Kim Woo-sang (current
ROK Ambassador to Australia) on foreign policy and national
security issues. Hyun helped draw up Lee's
"Denuclearization, Opening 3000" initiative and was
subsequently a member of the presidential transition team.
Mentioned early in 2008 as a candidate for the Foreign
Minister or National Security Advisor positions, Hyun instead
continued to quietly advise Lee behind the scenes.
Considered to be a conservative scholar, Hyun is also a pupil
of former Foreign Minister Han Sung-joo, who is also said to
advise President Lee on foreign policy.


3. (C) Coming on the heels of the January 18 threat from the
DPRK Army Chief of Staff to take a more confrontational
posture toward the ROK, Lee's selection of Hyun is widely
interpreted by media pundits as asignal that he plans to stay
the course on North Korea policy. Perhaps. A more likely
explanation is that Hyun, being very close to President Lee,
will be more willing and enthusiastic in forwarding the Blue
House vision of inter-Korean relations. On learning of his
nomination, Hyun defended strongly the "Denuclearization,
Opening 3000" initiative. He also said that he viewed
inter-Korean relations as being linked with ROK-U.S. and
U.S.-DPRK relations. Inter-Korean relations, Hyun said, must
be considered within the context of South Korea's overall
diplomacy.

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NIS Director Won Sei-hoon
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4. (C) Also a close aide to Lee during the presidential
campaign, Won Sei-hoon served as Minister of Public
Administration and Security before being picked to serve as
NIS Director; he does not have intelligence background. Won
also spent many years in administrative positions with the
Seoul municipal government, including during Lee's tenure as
mayor.

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Ambassador to the U.S. Han Duck-soo
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5. (C) Han Duk-soo was named Korean Ambassador to the U.S.
January 18. From North Jeolla Province, Han is a career
civil servant, rising rapidly especially under Presidents Kim
Dae-jung and Roh Moo-hyun. Han was Roh's last prime
minister, playing a leading role in successfully building
Korean public support for the KORUS FTA. Most expect the
free-market advocate Han will be in charge of building
support for the agreement's ratification in the U.S. The
career economic technocrat received his PhD in economics from
Harvard in 1984 and is well respected by both conservatives
and liberals. The choice of Han, from the liberal stronghold
of Jeolla, is widely hailed as a sharp political move by
President Lee. Han has no particular connection to President
Lee but, according to Blue House sources, has met frequently

with Lee since last fall when the economic crisis began and
he joined the National Economic Advisory Council.


6. (C) Han served most of his career in the National Tax
Service, the Economic Planning Board and the Ministry of
Trade and Industry (MTI--which was comprised of the current
ministry (MKE) and the trade policy division that has since
been moved to MOFAT) after entering the civil service in

1970. Han served as Vice Minister of MTI during the IMF
crisis in 1997-8 and was the first trade minister in MOFAT
from 1998-2000. Subsequent postings included Ambassador to
the OECD in 2001, Senior Secretary to the President for
Policy Planning and Economic Affairs from 2001-2, Minister of
Policy Coordination (in the Prime Minister's office) from
2004-5, Deputy PM and Minister of Finance from 2005-6 and PM
from 2007-8. Han's appointment does not need National
Assembly approval. Despite his regional background and the
important roles he played in the DJ and Roh administrations,
Han is seen first as a technocrat and a political survivor.
Born in 1949, Han has no children.

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Reaction to the Shakeup
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7. (C) Many in the GNP, the ruling party, had hoped to end up
with a cabinet position. Their disappointment is a good sign
for President Lee, because he does not want to be accused of
playing politics at this time of economic crisis; the public
is quite comfortable with the lack of politicians in the new
line-up. Hyun, the Unification nominee, will probably have a
hard time in the National Assembly hearings. As one of the
architects of the Lee administration's approach to North
Korea, he is also likely to draw opposition from Democratic
Party (DP) members critical of Lee's handling of inter-Korean
relations. He will also be drilled for his wealth. At the
end of the day, however, there is no up-or-down vote, so
unless there is some wrong-doing in his background, Hyun too
is likely to be confirmed.


8. (C) Among this round of appointments is the new national
police chief, Kim Seok-ki, who, as Seoul police chief,
ordered a SWAT team to take-over a building occupied by
squatters on January 20. This action resulted in six deaths,
including one police officer. Kim is already receiving
criticisms that he was too quick off the mark in opting for
such a show of force, as the squatters had occupied the
building barely more than one day. President Lee may have to
look for another police chief if these criticisms become
louder.
STEPHENS