Mr Restructuring returns as S. Korea’s FM

Lee held the post for only seven months in 2000 but led the country’s financial restructuring during the preceding two years in the immediate aftermath of the 1997-98 financial crisis.

“There’s not much for him to tackle urgently but people want to see Lee take full control of the government in all economic matters with a strong sense of responsibility,” said Oh Suk-tae, an economist at Citibank in Seoul.

President Roh Moo-hyun, who rose to power a year ago with little support from the political establishment and without a majority in Parliament, called then for a smaller government and abolished the chief economic secretary’s post. Yet despite Roh’s desire to make the finance minister take the lead in government on all economic affairs, economists say the structural change actually created a lack of strong leadership in economic policy-making.

Economists say his predecessor, Kim Jin-pyo, who resigned after serving for a year to run for Parliament in April, had not stamped his authority on ministries other than his own — partly due to the short period of time in office.

Business leaders and economic analysts want Lee, three years older than Kim and with corporate as well as government experience, to take a wider view of economic affairs. The economic conditions are not the only new factor for Lee. He is serving in a very different administration whose President has an unorthodox leadership style. South Korea’s economy, which barely avoided bankruptcy with a $58 billion international rescue package about six years ago, now boasts the world’s fourth-biggest foreign reserves and is setting a moderate pace of growth aided by robust exports.

It has opened up its markets much more to foreign investors, its companies are heavily owned by foreigners and its banks — also under the scrutiny of many foreign shareholders — have become more sophisticated in managing assets. During the years since the crisis, foreign ownership in South Korea’s main stock exchange has more than tripled to about 40 per cent and the ratio of non-performing loans to total loans at local banks fell to less than three per cent from as high as 8.3 per cent.

The presidential Blue House credited Lee with “rich knowledge and experience” as a one-time chairman of the Financial Supervisory Commission and finance minister in the former President Kim Dae-jung administration and more than 20 years in the private sector.