Cabinet reshuffle looms, rattling Sejong ministries — Finance Ministry struggles to place officials as top talent heads to private sector

With a cabinet reshuffle to form the Lee Jae Myung administration's "second-term government" now within sight, major economic ministries are bracing for a mid-scale personnel shake-up next month, leaving the bureaucratic corridors of Sejong unsettled.

Adding to the unease, two officials widely regarded as star performers at the Ministry of Finance and Economy — both former secretaries to the previous administration's deputy prime minister — are preparing to leave for large conglomerates.

Officials in Sejong interpret their departures as a direct consequence of the Lee administration's emphasis on ideological vetting in personnel decisions, under which the label "former aide to the previous administration's deputy prime minister" has effectively become a liability.

According to sources in the Sejong government community Sunday, the Ministry of Finance and Economy, which is suffering severe promotion bottlenecks, intends to place three or four of its officials as deputy heads of the 17 metropolitan and provincial governments set to launch next month. The effort has run into difficulty, however, because local governments are seeking officials from the Ministry of Planning and Budget — the body that controls the national budget — rather than from the Finance Ministry.

In practice, metropolitan governments have long recruited deputy heads from central ministries precisely to help secure national budget allocations.

"I've heard the deputy prime minister is working hard to place three or four Finance Ministry officials as deputy heads of metropolitan governments," a Finance Ministry official said. "But would any metropolitan government really want someone from the Finance Ministry, which has no budget authority?"

"Local governments will want people from the Planning and Budget Ministry, which holds the budget power," the official added.

The former Ministry of Economy and Finance, which had overseen all economic policy, was split this year into the Ministry of Finance and Economy and the Ministry of Planning and Budget on the grounds that it had accumulated excessive authority. The consensus in government circles is that the Finance Ministry's standing has since diminished. Stripped of its budget function and unable to absorb the domestic financial policy functions of the Financial Services Commission, the ministry has lost much of its policy coordination clout.

Against that backdrop, two officials recognized as the Finance Ministry's best are each preparing to move — one to SK Group and one to Samsung. Both served as secretaries to the previous administration's deputy prime minister and handled exchange rate policy.

The official heading to SK hynix as an executive — referred to here as Official A — had long been described as a trailblazer, consistently earning the distinction of being the first woman to hold various posts, and was widely considered a future vice minister at minimum. After serving as secretary to then-Deputy Prime Minister Choo Kyung-ho, she took charge of foreign exchange operations as head of the foreign currency funds division in response to the high exchange rate environment. From January, she led the groundwork for establishing a Korean sovereign wealth fund modeled on Singapore's Temasek. It was widely rumored that she had originally been slated for the personnel affairs division chief post but was reassigned because of her association with the previous administration's deputy prime minister.

The official set to join Samsung Electronics as an executive — referred to here as Official B — currently serves as head of the foreign exchange system division at the International Finance Bureau, having previously headed the capital markets division at the Economic Policy Bureau. He oversaw the Bank of Korea and Financial Supervisory Service's foreign exchange inspections earlier this month into whether foreign exchange banks had engaged in speculative currency manipulation, and is a former secretary to then-Deputy Prime Minister Choi Sang-mok.

A third official — Official C, a Grade 5 civil service exam (Class 45) passer at the Ministry of Planning and Budget — is also reported to be leaving for Meritz Financial Group. In other ministries, Class 45 exam passers have largely been promoted to director-general in recent rounds, but at the Planning and Budget Ministry and the Finance Ministry, many have yet to even reach the senior deputy director level, reflecting severe promotion gridlock.

In government circles, there is cautious hope that a broader cabinet reshuffle could ease the personnel logjam. Prime Minister-designate Han Sung-sook completed her confirmation hearings June 25 and 26 and is expected to take office at the end of this month or early next month following a National Assembly confirmation vote, with a mid-scale reshuffle anticipated to coincide with her inauguration.

Within the ministries, the prevailing analysis is that if the vacancy at the Ministry of SMEs and Startups — created by Han's nomination as prime minister — is filled, and if the minister-level Office for Government Policy Coordination chief is replaced upon the new prime minister's inauguration, the resulting movement of vice ministers at the Finance Ministry and the Planning and Budget Ministry could trigger modest personnel shifts at those agencies as well.

Meanwhile, the Ministry of Trade, Industry and Energy is also expected to carry out a limited reshuffle of its Grade 1 officials in the near future. With six or seven Grade 1 officials stepping down just 11 months after Minister Kim Jung-kwan took office, some in government circles are asking whether he is tightening his grip on personnel decisions.

The Ministry of Climate, Environment and Energy is also seen as a candidate for a mid-scale reshuffle as part of the broader cabinet shake-up.