UNIFICATION MINISTRY RESTRUCTURING: LEANER AND

C O N F I D E N T I A L SEOUL 000976

SIPDIS

E.O. 12958: DECL: 05/08/2019
TAGS: PGOV PREL PINR PREF KS KN
SUBJECT: UNIFICATION MINISTRY RESTRUCTURING: LEANER AND
MEANER

Classified By: A/DCM Joseph Yun. Reasons 1.4 (b/d).


1. (SBU) Summary: Since the early days of the Lee Myung-bak
Administration, when the Ministry of Unification (MOU) was
slated to disappear, the MOU has been steadily weakened.
Earlier this month, the ROKG announced a restructuring of the
Ministry of Unification that:

-- raises the profile of unification policy planning and
analysis of North Korea's internal conditions and succession
possibilities,

-- deemphasizes economic/humanitarian assistance and family
reunions, and

-- removes several senior MOU officials closely associated
with Sunshine Policy and the October 2007 end-of-term summit
between then-President Roh Moo-hyun and Kim Jong-il.


2. (C) Summary Con't: The restructuring is essentially a
recognition that there is little or no room to engage and
negotiate with the North Koreans on issues ranging from
economic assistance to infrastructure projects to
humanitarian cooperation, i.e. the end of Sunshine Policy.
Instead, the MOU is supposed to become more of a
policy-and-research agency, with more emphasis on research
than on policy, a role many of our MOU contacts are not eager
to embrace. Among MOU offices that deal with funds, only the
refugee office received an increase in funding. End Summary.

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Background: MOU Survived
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3. (C) South Korea's Ministry of Unification (MOU) was on the
chopping block after President Lee Myung-bak won the December
2007 election. MOU survived, largely because progressive
forces came to its defense; it also helped that the Ministry
of Foreign Affairs and Trade (MOFAT) resisted the
acquisition. However, it was clear from the outset of Lee's
term that the Sunshine Policy era had ended and MOU was no
longer riding high. MOU lost 80 out of about 500 positions,
moved from its own building into the lower floors of the
MOFAT building, and adopted a low profile under Lee's first
Minister of Unification, veteran MOFAT diplomat Kim Ha-joong.
North Korea's outright rejection of Lee's suggested
"Denuclearization, Openness, USD 3,000" proposal -- calling
for increased economic engagement provided that
denuclearization progress continued -- reinforced MOU's low
profile. There were no more inter-Korean meetings nor
economic aid, MOU's bread and butter.


4. (SBU) The July 2008 shooting death of a South Korean
tourist at Mt. Kumkang, and the North's refusal to allow an
investigation, prompted the ROKG to close the tourist resort.
The North cut off tours to Kaesong City in December, leaving
the Kaesong Industrial Complex (KIC) as the only remaining
inter-Korean economic project. The North's December 2008
restrictions on the number of South Koreans who could access
the KIC, March temporary closures, and April announcement
that all agreements pertaining to the KIC needed to be
renegotiated have left even that flagship project in limbo.
In short, MOU's universe has virtually disappeared, as has
its clout in the ROKG.

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Restructuring: More Policy, Intel, Research; No Money
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5. (SBU) The ROK cabinet on May 12 approved the Ministry of
Unification,s proposal to disband its Humanitarian
Cooperation Bureau and create a new Information Analysis
Bureau that will focus on analyzing internal political
developments in the DPRK. Assistant Minister for Planning
and Coordination Kim Jung-tae told the press, "The
restructuring aims to strengthen the Ministry's long-term
unification policy-making and intelligence analysis
functions." An intelligence analysis office with similar
functions to the newly-created bureau had been disbanded a
year earlier by the Lee administration with the justification
that its functions overlapped with those of the National
Intelligence Service (NIS),Ministry of National Defense
(MND),and the Ministry of Foreign Affairs and Trade (MOFAT).
The restoration, analysts explained, was due to concerns
within the ROKG and National Assembly that the MOU lacked the

ability to analyze North Korean developments. A May 13
Dong-A Ilbo article said that concerns about the increase of
uncertainty inside the DPRK since KJI's reported stroke last
August contributed to the decision to consolidate MOU,s
intelligence analysis function.


6. (SBU) On the other hand, the Ministry's Humanitarian
Cooperation Bureau, which had overseen issues related to ROKG
humanitarian assistance, separated families and DPRK
defectors closed as a result of the restructuring plan. The
bureau was first created in 1996 under the Kim Young-sam
administration. Two of its divisions -- Separated Families
and Resettlement Support -- will be absorbed into the
Unification Policy Office, which will be upgraded and led by
an Assistant Minister. POW/abductee and NK human rights
issues will also be addressed by the Separated Families
Division. The Humanitarian Assistance Division will be
absorbed into the Inter-Korean Exchanges and Cooperation
Bureau.


7. (SBU) A total of four divisions will be closed as a result
of the reshuffle, but according to MOU, personnel will
increase from the current 470 to 475, with the 5 new
personnel that will be hired at Hanawon. Despite MOU's
attempt to "right-size" for the second time since the
inauguration of President Lee, North Korean defector related
offices and budget have been continually increasing. In July
2009, Hanawon will open a new facility for adult males in
Yangju City, located 30 Km north of Seoul. Hanawon
headquarters where women and children receive training for
two months upon arrival completed its expansion in December
2008, increasing their maximum capacity from 300 to 600.
Hangyerae Middle and High School for defector teenagers is
also planning to build a second school to accommodate the
overflow. MOU also increased the number of scholarship
offers to defector college students from 30 to 60 this year,
providing approximately USD 3,000 per year. Three students
who study overseas also receive MOU scholarship (two in the
United States and one in Japan) of approximately USD 6,000
per year.


8. (SBU) Korean press reaction is mixed on the latest
reshuffle, with even conservative papers like the Hankook
Ilbo reporting on public concerns that the reshuffle could
give the "wrong signal" to the DPRK under the current
stalemate in inter-Korean relations. Other critical opinions
include concerns that the ROK will lose its leverage in its
relations with the DPRK by giving up its humanitarian
assistance negotiation card. In analyzing the reshuffle,
however, all papers agreed that the latest development
reflected the current state of inter-Korean relations.

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Sunshine Policy Officials Out
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9. (C) The restructuring also had a political element in that
leading Sunshine Policy MOU officials have been forced out.
Former Hanawon Defector Resettlement Center Director Koh
Kyung-bin (Assistant-Minister level) and former Senior
Delegate for Inter-Korean Dialogue Cho Yong-nam resigned
ahead of the reshuffle. Both Koh and Cho had held high-level
posts in the Roh administration -) Koh as Deputy Minister
for Policy and Public Relations and Cho as Assistant Minister
for Planning and Coordination -) and respectively played
major working-level roles in drafting the October 2007 summit
declaration. Cho Myung-kyun, another main MOU player during
the Roh administration through his role as Presidential
Secretary for National Strategy, had resigned last October.
As a result, the South Korean press reported that all of the
main MOU players from the Roh administration -) Koh
Kyung-bin, Cho Yong-nam, Cho Myung-kyun -) have left the
scene after a year of the Lee administration. The fourth and
final key player of the Sunshine Policy, Kim Young-tak, was
reassigned from his office in charge of more than 60 staff
and all-things related to Kaesong Industrial Complex to an
office in the North-South Dialogue building without a single
staff. According to one of our MOU contacts, the move was to
"prepare Kim for his departure in the coming months."

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Comment
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10. (C) Prior to his appointment as Minister of Unification,


Hyun In-taek was the Ministry's biggest critic, responsible
for the LMB transition team's proposal to be completely rid
of it. Ironically, Hyun is now the MOU's biggest asset,
because his strong relationship with LMB means survival for
the ministry. The price, however, is a distinctly weakened
MOU, concentrating more on research, intel and analysis than
anything operational. This change in fortune is deeply
disappointing for our MOU contacts, who for decade or more
were used to being in a premier ROK agency on the cutting
edge of all things North Korean.
STANTON