By Oh Young-jin
The influence of Kang Man-soo, President Lee Myung-bak’s first strategy and finance minister and currently President Lee’s special advisor and chairman of the blue-ribbon Council on National Competitiveness, is hard to miss in the setting-up of national economic policy.
When Lee took power, ending 10 years of liberal rule, the 66-year-old career bureaucrat, who faced Korea’s financial crisis under his watch, was taken out of mothballs and put in the driver’s seat of Asia’s fourth largest economy.
Kang sounds the same note in philosophy as the late U.S. conservative President Ronald Reagan, who identified the government as the cause of the problem, not the solution. His advocacy of tax cuts still forms the mainstay of the Lee administration’s economic governing principle.
It is said that President Lee respects him as nothing less than his mentor.
Perhaps, it won’t be necessary to dredge up old tales of their camaraderie as members of the congregation in the church they go to or the fact that Kang led Lee’s presidential transition team.
But, it is worth pointing out that a number of important decision-makers owe Kang a lot for where they are and are ready to pledge their allegiance to him.
Thus, it may sound odd, if Kang is pursuing the top post of one of three leading banking groups ― Woori, Shinhan and Hana.
After all, he is enjoying the privileges of assisting the President from close quarters, having great bearing on how the Korean economy is managed.
In a nutshell, if there is anyone, who should see Lee through his term, putting the finishing touches on the presidential legacy of Lee, who prides himself in being an “economic President,” it should be former Minister Kang.
At least indirectly, however, Kang is saying that he is ready to take a chance at gaining his place in history with a job as a banker. The rumor mills are already working overtime on his ulterior purpose of seeking to be a banker and the impact it may have on their jobs.
Some attribute Kang’s change of tack to a typical “third-year itch” among presidential aides who are trying to cash in on their connections before the boss’ term expires and they leave power.
It is frequently said among sources that Kang has family problems and needs a great deal of money.
The sources say that Kang is at the stage of comparing the three potential positions with each other to see which will get him the biggest paycheck.
According to their observations, Kang is reluctant to go to Woori, being in the process of privatization, because its remuneration package is small, while Shinhan offers him better pay but carries the risk that the move will paint his boss Lee as an interventionist.
The Hana job may be overly taxing, as it is in the middle of merging with the Korea Exchange Bank under its Chairman Kim Seung-yu, they say.
The terms of the chairmen of the three financial groups are expiring so they have to be re-appointed or retire before their shareholders’ meeting in March.
I don’t see Kang as any less qualified than the incumbent heads or, for that matter, than any other potential candidates.
If he gets the Woori job, it may expedite its privatization process that has been stalling after the bidding didn’t find a winner. Incumbent Chairman Lee Pal-sung may be held accountable for the delay.
As Shinhan’s new leader, Kang could bring law and order to the operations of what some say is Korea’s only truly private banking group, which has been roiled by an internal power struggle between its Chairman Ra Eung-chan and Shin Sang-hoon, head of its flagship bank. Ra and Shin were forced to step down. Currently, Ryu Shee-yul, who has close ties with Ra, is leading it on a temporary basis.
Some reports say that Ra and Shin are fighting a proxy war, with Kang being pushed to its center. It would be easy to see Ra trying to enlist government support by bringing Kang to his side and making him his successor.
As Hana leader, it can be argued that Kang could provide a fresh start as the leader of a Hana, to be bigger with the KEB acquisition, helping spur on regulators’ approval process and consolidating the post-merger period.
It is hard to blame Kang for asserting that he can do as well as Euh Yoon-dae as chairman of KB Financial who is gaining initial success in overhauling the stagnant former No. 1 banking group.
In his defense, Euh is different to Kang because he is neither a career bureaucrat nor an official policy assistant to President Lee. His friendship and school ties with President Lee were the sole reason his KB appointment was initially under fire.
Kang may also argue his case by pointing out that even in countries with advanced banking systems, top presidential aides take plum private-sector jobs in the classic case of revolving doors.
Despite his strong points as leader of any of the three financial groups, I suggest that Kang ask himself what he would be losing in return for the job ― a chance for the Korean banking system to work by itself. We know how a lack of self-prudence in the financial sector has acted as a drag on Korea Inc. I bet that is not something Kang, now a stalwart in the decision-making process of the Korean economy, will be remembered by.