Incoming Leader Makes Early Impact in S. Korea

SEOUL —  At first glance, the situation in South Korea these days looks like a recipe for political paralysis.

The country is in economic crisis. President Kim Young Sam is a lame duck. His successor, Kim Dae Jung, doesn’t take office until Feb. 25, and the former dissident frightens some bureaucrats who are nervous about change and political retribution. Nearly 60% of voters in last month’s election favored other candidates. Official documents reportedly are being frantically destroyed before the country’s first-ever change of power to an elected opposition.

Things could still go badly wrong before Kim Dae Jung takes office. Despite all these challenges, however, the president-elect is on a roll.

The sense of national crisis reflected in South Korea’s recent turn to the International Monetary Fund for a $60-billion bailout is, in many ways, strengthening Kim Dae Jung’s hand.

Kim Young Sam continues to run the country, at least officially. But it was Kim Dae Jung who called the shots this week when the National Assembly passed a crucial financial reform package required as a condition of the IMF bailout.

The president-elect’s party holds only a minority of seats in the National Assembly. Yet Kim Dae Jung demanded--and won--revisions in a key bill that will put a new financial watchdog agency under the prime minister’s office rather than the Finance Ministry. That last-minute change came even though the Grand National Party of defeated presidential candidate Lee Hoi Chang, which still holds a parliamentary majority, initially resisted the idea.

“Kim Dae Jung’s first test facing an opposition majority in the National Assembly was a victory,” raved the Joong Ang Daily News, a major national newspaper not known for pro-Kim Dae Jung sympathies.

Right now, the center of economic decision-making in South Korea is a 12-member committee called the Emergency Economic Policy Team. Half of the members were appointed by Kim Young Sam and half by Kim Dae Jung.

Indications are that, rather than being paralyzed, the committee members are working together to satisfy conditions of the IMF bailout and ensure that the flow of rescue funds is not cut off. Committee members from the current government are the finance, trade and foreign ministers, representatives of the president and prime minister, and the central bank governor.

The committee’s work also is supplemented by regular meetings between the outgoing and incoming presidents, despite a long history of bitter rivalry between the two. Those sessions are now scheduled to be held every Tuesday morning until Kim Dae Jung takes office.

The emergency economic team is functioning well mainly due to “the sense of crisis,” said Lee Jong Chan, a top Kim Dae Jung aide who directed the president-elect’s campaign. “We don’t think we have a power vacuum.”

The committee’s point man for dealing with the IMF, Lee added, is Kim Dae Jung appointee You Jong Keun. He is the governor of Chollapuk province, which forms part of the president-elect’s political home base.

You, 53, spent 24 years in the United States, acquiring U.S. citizenship and becoming a professor of economics at Rutgers University in New Jersey. He gave that up to return to South Korea, where in 1995 he won his governor’s post. You has run a reformist administration that has emphasized attracting foreign investment, and among those in the Kim Dae Jung camp he is an advocate of open markets.

You’s beliefs thus mesh nicely with IMF prescriptions for the country’s ailing economy. The governor also is widely recognized as having Kim Dae Jung’s ear.

“Someone described me as ‘the IMF type of reformer,’ ” You said. “I have no problem with that.”

You acknowledged that some in the Kim Dae Jung camp favor the more closed and tightly regulated economic system that supported the South Korean economic miracle of the past four decades. But You said he is confident that such opposition to reforms will not derail the incoming administration’s focus on open-market economic policies.

“I’m not terribly worried about it, first because the president-elect agrees with me and second because we do not have much choice but to accept the package the government signed with the IMF,” You said. “Some people may accept it very reluctantly. Some may accept it wholeheartedly. I’m on the latter side. In any event, there’s not going to be any strong resistance, so I do not have any worry about implementing these policies.”

You also said he believes that Kim Dae Jung can cope with his lack of a parliamentary majority.

“I advised him, ‘When you face opposition in the National Assembly, go directly to the people in the manner of Ronald Reagan,’ ” You said. “Because Kim Dae Jung is a very persuasive man, I’m quite sure he can do that, although this is not an ideal situation for him.”

The broader political and administrative work of the transfer of power is being handled by a separate transition committee headed by Lee Jong Chan, Kim Dae Jung’s campaign manager. This panel is composed entirely of representatives of the two political parties in the incoming camp: Kim Dae Jung’s National Congress for New Politics and the allied United Liberal Democrats.

Lee’s 24-member transition team is facing tougher going in its relations with the outgoing administration. That’s mainly because one of its tasks is to uncover the policy mistakes and possible corruption that led to the nation’s economic crisis. Terrified outgoing officials and some civil servants desperately want to hide illegal or stupid actions, and Korean media have been full of reports that some have been destroying documents in order to do so.

“We have to reform the government system, but before that we have to know what are the real facts, what happened in the last year,” Lee said. “We have to know what the last government did right and did wrong.”

Lee said that in the economic crisis, for example, “I think there was some early warning” from bureaucrats but higher officials “ignored that.”

National security is another field in which Korean media have reported suspicions of large-scale illegal destruction of documents, including records of internal surveillance and secret operations conducted against President-elect Kim while he was a leader of the opposition.

Lee stressed that his committee “is not the prosecutor. We only want the real facts. If we find some guilt, we have to report to the prosecutors.”

Lee’s committee has urged government ministries to ensure that documents are not destroyed. Top officials all the way up to President Kim have agreed that the shredding should end, but it is unclear if it has.

Chi Jung Nam of The Times’ Seoul Bureau contributed to this report.