Strategy and Finance Minister Kang Man-soo puts his hand on his forehead in frustration during his appearance at the National Assembly in Yeouido, Seoul, Friday. / Korea Times
By Kim Jae-kyoung
What saved the ``bureaucratic life'' of Minister of Strategy and Finance Kang Man-soo? It was the $30 billion swap agreement signed between Korea and the United States last week. He does not deserve credit for the deal (as he himself has admitted), however.
Prior to the swap deal, Kang had been under pressure to step down for his misguided foreign exchange policy. Kang is at the main control tower of the nation's economic policies, but his inconsistent policies have eroded his credibility in the market.
With the swap agreement, Kang regained some confidence from President Lee Myung-bak and markets. But the finance ministry's unfair media play to save Kang put relations with the Bank of Korea (BOK) on an uneasy footing.
Kang made an apology call to BOK Governor Lee Seong-tae for his men's amateuristic handling of information but it seems that relations between the two parties still went sour.
The disagreement started when the finance ministry violated international rules by leaking embargoed information to the media. The central bank had been in behind-the-curtain negotiations with the U.S. Federal Reserve since Sept. 24 and agreed to announce the swap agreement at 4:00 a.m. on Oct. 30 at the same time.
However, Korean media reported the news on the evening of Oct. 29 after a ranking finance ministry official intentionally leaked the information regarding the swap deal to show off its role in the agreement.
The central bank was perplexed with the ministry's move as it had prepared a media briefing secretly in accordance with the agreed-upon announcement schedule together with the Fed.
Rows deepened further.
The ministry said that Kang took the initiative in reaching the agreement and his behind-the-scene contact with the U.S. Treasury of Finance was the crucial factor in the U.S. central bank changing its stance and signing the deal.
The news made headlines in the local media, which again offended the central bank, which claimed Kang's comments could give the impression that the U.S. Treasury of Finance and the finance ministry were at the center of the agreement, although the Fed and BOK signed the deal.
Governor Lee was angered by the news and was quoted as saying, ``It could make the Fed feel uneasy, making it more difficult for the central bank to extend the swap agreement next year or sign a swap deal with other countries.'' Kang made another apology call on account of the confusion.
No matter which organization played the key role in the swap deal, it seems that the finance ministry's foul play to save Minister Kang is where the blame should lie.