Lee reshuffles Cabinet with new economic chiefs, younger faces

President Lee Jae Myung nominated new ministers for six ministries on Sunday in his first Cabinet reshuffle, a broader-than-expected shake-up that comes as his approval ratings have been declining.

The reshuffle went beyond the Ministry of SMEs and Startups and the Ministry of Justice, where changes had long been expected following SMEs Minister Han Seong-sook's appointment as prime minister and Lee's acceptance of former Justice Minister Jung Sung-ho's resignation. Nominees to lead four other ministries — the Ministry of Finance and Economy, the Ministry of Land, Infrastructure and Transport, the Ministry of National Defense and the Ministry of Gender Equality and Family — were part of the massive reshuffle.

"The idea is to lace up our shoes again and work hard," a senior presidential office official said, referring to the shake-up.

Lee Hyoung-il, the first vice minister of economy and finance, was nominated as deputy prime minister and finance minister.

He was appointed first vice minister shortly after the Lee administration took office and helped lay the groundwork for its economic policies. Since the launch of the reorganized Ministry of Finance and Economy, he has spearheaded the introduction of a price ceiling on petroleum products and a real estate tax reform plan. His appointment would make him the first sitting vice minister in two decades to directly take the hot seat across the current Finance Ministry and its predecessor organizations.

Hong Jee-sun, the second vice minister of land, infrastructure and transport, was tapped to lead the Land Ministry. Hong will be responsible for housing policy, which has ranked as the top reason for the president's sliding popularity.

Hong is a member of the so-called Gyeonggi Line, officials who worked with President Lee during his tenure as the province's governor. Hong served as head of Gyeonggi's urban housing office and helped formulate then-Gov. Lee's basic housing policy, which aimed to provide long-term public rental housing.

Hong was still a Grade 2 local government official before being appointed vice minister last December. Although Grade 2 is the second-highest rank in Korea's nine-tier civil service hierarchy, his rise from Grade 2 to vice minister and now ministerial nominee in just nine months is considered remarkably rapid.

Many within the ruling bloc had initially expected no economic ministries to be included in the reshuffle aside from the Ministry of SMEs and Startups, whose top post had been vacant. The reshuffle therefore came as a surprise.

Finance Minister Koo Yun-cheol arrived at Incheon International Airport on Sunday morning for a business trip to the United States when he learned that a successor had been named. After the news made him cancel his flight at one point, Koo reversed course and is on his way to the United States.

"Even the secretary's office at the presidential office responsible for the relevant work didn't know," a source from the ruling bloc said.

Promoting sitting vice ministers to lead key economic ministries is construed as an attempt to quell public dissatisfaction with specific policies through changes at the top while preserving the administration's economic policy direction.

"Lee Hyoung-il was the person who personally announced the real estate tax reform plan that was at the center of the controversy," another source from the ruling bloc said. "Even if there are some adjustments, this could mean there will be no significant change to the overall direction of the economic policy."

With President Lee signaling an all-out push to accelerate housing supply, the nomination of a Gyeonggi Line member as land minister is also seen as part of the administration's push to drive housing policies forward.

The Gyeonggi Line is already influencing housing policy in the form of member Lee Seong-hoon. He formerly served as presidential secretary for land and transportation as well as head of Gyeonggi's construction bureau while President Lee was governor, and is currently the CEO of the state-run Land and Housing Corporation.

Key presidential economic aides — presidential chief of staff for policy Kim Yong-beom and senior presidential secretary for economic growth Ha Joon-kyung — were left untouched in Sunday's reshuffle. The opposition has called for their dismissal over controversial economic policies, including the introduction of single-stock leveraged exchange-traded funds.

The presidential office also made clear that nominations for economic ministries were not dismissals for poor performance.

"We did not select new ministerial nominees because of any assessment of their predecessors," presidential chief of staff Kang Hoon-sik said. "We made competence the sole criterion for the Cabinet appointments so that we can bring about tangible changes that the public can feel more quickly and spread them more broadly."

Lee also nominated DP Rep. Kim Seung-won, a former judge and two-term lawmaker representing the Suwon A constituency in Gyeonggi, as minister of justice.

Ret. Gen. Kang Shin-chul, Korea's ambassador to Saudi Arabia, was nominated as minister of national defense. Kang is a graduate of the Korea Military Academy who previously served as deputy commander of the Korea-U.S. Combined Forces Command.

Lee Hai-min, a lawmaker from the Rebuilding Korea Party, was tapped to succeed Ha Jung-woo as senior presidential secretary for AI and future planning. Lee Won-ju, currently head of the energy transition policy office at the Ministry of Climate, Energy and Environment, was tapped for a new position that would advise on the government's "megaprojects," large-scale national initiatives focused on semiconductors, physical AI and AI data centers.

Ha Jung-woo, meanwhile, was nominated as vice chair of the National AI Strategy Committee, a position that has remained vacant.

Another theme of the reshuffle is a younger Cabinet.

Democratic Party (DP) Rep. Lee So-young, a 41-year-old two-term lawmaker representing Gwacheon-Uiwang in Gyeonggi, was nominated as minister of SMEs and startups. Basic Income Party Rep. Yong Hye-in, a 36-year-old two-term proportional representation lawmaker, was tapped as minister of gender equality and family.

Kim Hee-jung — who became minister of gender equality and family during the Park Geun-hye administration in 2014 at 43 — is the youngest minister since Korea adopted direct presidential elections under its 1987 constitutional amendment. If either Lee So-young or Yong is appointed following a confirmation hearing, the record for Korea's youngest-ever minister will be broken.

"The presidential office had a very strong desire to appoint younger Cabinet members," a DP lawmaker aligned with Lee said.

The two nominations are seen as an attempt to bring perspectives and experiences of people in their 30s and 40s to the rapidly changing policy areas of startups and gender equality.

Rep. Lee was the only lawmaker to speak against an amendment to the Pharmaceutical Affairs Act during a National Assembly plenary session on Aug. 20, helping draw 83 votes against or abstentions. The amendment restricts telemedicine platforms from also operating pharmaceutical wholesale businesses, amid concerns over conflicts of interest.

Rep. Yong has consistently advocated for measures to combat digital sex crimes, promote work-life balance and protect socially vulnerable groups.

BY OH HYUN-SEOK [[email protected]]