Excluding ‘Mofia,’ Park promotes inside figures

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Excluding ‘Mofia,’ Park promotes inside figures

President Park Geun-hye’s nomination on Monday of Lee Ju-yeol, Bank of Korea’s former senior deputy governor, to head the central bank underscores her willingness to seat internal figures in top posts in public companies, banking institutions and the government.

The previous Lee Myung-bak administration was notorious for its appointments of senior officials from the Ministry of Strategy and Finance, a trend that led to the creation of the term “Mofia” - a combination of MOF (Ministry of Finance) and mafia that referenced those members.

These officials, however, have been largely absent in the current administration. So far, Park has shown a tendency toward promoting existing workers to senior positions.

Should Lee pass the hearing process at the National Assembly, he will be the fourth BOK worker to ascend to the top spot since 1987, when Korea was democratized. Current Governor Kim Choong-soo, whose four-year term ends at the end of this month, was the presidential economic secretary under the Lee administration before taking office as the BOK chief.

A few academics and government officials were considered for the post, according to sources, though President Park ultimately picked a member from the BOK.

In the banking sector, it is particularly evident that the Park administration has refrained from appointing a member of the Mofia.

Three state-run banks - the Korea Development Bank, the Industrial Bank of Korea and the Export-Import Bank of Korea - were once dominated by Mofia members. But the winds of change swept in last year in April, when Hong Kyttack, a former economics professor, was appointed as chairman of the KDB Financial Group and the chairman and CEO of KDB.

The move was followed by the decision late last year to place Kwon Seon-joo, deputy CEO, in the top spot at the Industrial Bank of Korea after Yun Yong-ro, the head of the Korea Exchange Bank, failed to be reappointed. He served at the Finance Ministry and the Financial Supervisory Service before joining the bank.

Internal figures have also made up the entirety of vice ministerial posts appointed this year, including in the Ministry of Foreign Affairs, the Ministry of Security and Public Administration and the Ministry of Land, Infrastructure and Transport.

“What President Park focuses on when it comes to appointments is whether the person has expertise and whether the selection could boost the morale of the organization,” a Blue House official said. “The organizations that saw their workers promoted turned ever more passionate.”

Another presidential office source said the president was inspired by a comment made by one of the attendees of the National Economic Advisory Council meeting in November who stated that “government-led finance is deeply problematic.”

BY HUH JIN, SEO JI-EUN [spring@joongang.co.kr]

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