Korea: Is era of ‘Mofia’ gone under Park administration? The compound word of an acronym of the Ministry of Finance (MOF) and mafia referred to the financial bureaucrats who dominated key positions and wielded great influence in the local financial sector

Is era of ‘Mofia’ gone under Park administration?

By Yi Whan-woo

Is the era of “mofia” gone?

The compound word of an acronym of the Ministry of Finance (MOF) and mafia referred to the financial bureaucrats who dominated key positions and wielded great influence in the local financial sector.

Seemingly, the mofia don’t have the same level of power under the Park Geun-hye administration as in the past.

Park’s recent selection of her top financial nominees has raised speculation that she may not rely on the officials who built their careers at the finance ministry.

Of the six major economic posts, only the Financial Services Commission will be headed by Shin Je-yoon who began his bureaucratic career at the ministry. Five others, including deputy prime minister, chief economic advisor for the President, strategy planning and economic secretaries, will be headed by those who started their career at the Economic Planning Board (EPB), which was dissolved in 1994.

Park’s appointment is in contrast to her predecessor Lee Myung-bak, who preferred the mofia to use their expertise and influence to nurture the country’s financial sector. Observers say her selection stems from Park’s vision for welfare policy that requires advice from macroeconomic experts from the EPB, which spearheaded rapid economic growth during the rule of Park Chung-hee, the late father of Park Geun-hye.

Shin, 54, served as vice finance minister before he was tapped by Park as the top financial regulator.

Of the five others, Korea Development Institute President Hyun Oh-seok was nominated as the minister of strategy and finance and also will concurrently serve as deputy prime minister. Hyun, 62, began his career as an economist at the EPB in the 1970s although he worked at the finance ministry after the EPB was scrapped.

Cho Won-dong, the nominee for Park’s chief economic advisor, has served as the president of Korea Institute of Public Finance, a state-run tax research center. Cho, 56, worked at the EPB in the early 1980s and has expertise on tax.

Hong Nam-ki will serve as the strategy planning secretary for Park while Joo Hyung-hwan was named as the secretary for the economic and financial affairs. Hong, 52, was the director general of the policy coordination bureau at the finance ministry, and built his career as a budget planner at the EPB.

Joo, 51, was the deputy finance minister and started his bureaucratic career at the EPB’s general affairs division.

Kim Dong-yeon, tapped as a minister at the Prime Minister’s Office, was one of the two vice finance ministers with Shin. Unlike Shin, Kim, 55, began his career at the EPB in the 1980s.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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