South Korea Reshuffles Cabinet

President Kim Dae-jung replaced nearly half his Cabinet on Monday, appointing a new finance minister to allay criticism that the pace of his economic reform program was sluggish.

Kim retained Prime Minister Lee Han-dong in his largely ceremonial post in the reshuffle that affected eight out of 19 posts. Most of the ministers affected held economic posts and were responsible for implementing reforms drawn up during Asia's currency crisis two years ago.

The reorganization was not expected to affect the Kim government's much-touted engagement policy toward North Korea, because all Cabinet members handling inter-Korea affairs were retained.

The backbone of Kim's so-called "sunshine" policy toward the communist North is economic exchanges and cooperation. Presidential aides said the new economic team will strongly support that policy.

Although South Korea's economy has recovered sharply since the crisis two years ago, analysts and opposition leaders have accused Kim's economic team of mishandling the nation's top conglomerate and other failures that have led to stagnancy in the stock market.

The new finance and economy minister is 59-year-old Jin Nyum, who had served as chief budget planner under the current government since 1998.

Jin's career has spanned nearly four decades under five successive administrations starting in 1963. He served as trade and labor ministers in the early 1990s.

Jin's team will help restore market confidence in government policies, said Paeng Sung-il, a research fellow at Daewoo Economic Research Institute.

Jin replaced Lee Hun-jai, who was named to head the finance ministry in a partial Cabinet reorganization in January. Lee was the government's chief financial regulator before taking the post.

Lee had been synonymous with a high-profile restructuring of South Korea's financial sector under a reform program worked out in exchange for a multibillion-dollar loan package from the International Monetary Fund.

Under Lee's direction, dozens of financially weak banks were closed, restoring foreign investor confidence in South Korea's once-troubled economy.

But he has been criticized for his handling of the financial woes of Hyundai, South Korea's largest conglomerate.

One of Hyundai's major subsidiaries, Hyundai Construction and Engineering Co., recently avoided default on payments only with government-arranged loans.

Hyundai's problems were blamed partly on the government's failure to enforce regulations to restructure South Korea's inefficient, family-controlled conglomerates.

Hyundai has more than 50 subsidiaries under its control. Hyundai has failed to keep its repeated promise to slim down by selling or spinning off unprofitable subsidiaries.

All but one of the Cabinet posts affected were economic.