Kang Man-soo (姜萬洙, born June 30, 1945) is a South Korean economic bureaucrat. A graduate of the Seoul National University Faculty of Law, he was responsible for the introduction of the value-added tax, the introduction of the real-name financial transaction system, and the liberalization and opening of financial markets. At the time of the IMF crisis, he was vice minister of the Ministry of Finance and Economy. He planned the 747 Pledge of presidential candidate Lee Myung-bak and served as the first Minister of Strategy and Finance in the Lee Myung-bak administration.1
Career
Born in Hapcheon, South Gyeongsang Province, he graduated first in his class from Gyeongnam High School in 1965 and received a bachelor's degree from the Seoul National University Faculty of Law in 1969. In 1970, he passed the Higher Civil Service Examination (8th session) first in the finance and economy category and began his public service at the National Tax Service. From 1985 to 1988, he served as a financial officer at the Korean Embassy in the United States (based in New York).
During his tenure as financial officer in New York in 1986, with the help of a recommendation letter written by Tate, deputy director of the IMF Fiscal Affairs Department, with whom he had worked to introduce the value-added tax, he chose to study economics rather than his major of law and was admitted to the graduate school of New York University.2 The graduate school of New York University began its classes at 6 p.m., and it was a place frequented by many people from Wall Street financial institutions.3 In 1987, he received a master's degree in economics from the graduate school of New York University (NYU) in five semesters, including a summer session.3
From 1988 to 1993, he served as director of the Insurance Bureau, director of the Financial Policy Bureau, and director of the International Finance Bureau of the Ministry of Finance, and from 1994 to 1995, he served as director of the Tax Bureau of the Ministry of Finance and the Ministry of Finance and Economy.
From 1995 to 1996, he served as the 14th Commissioner of the Korea Customs Service, and from 1996 to 1997, as vice minister of the Ministry of Trade, Industry and Energy.
From 1997 to 1998, he served as the 4th vice minister of the Ministry of Finance and Economy. In 1999, he served as full-time vice chairman of the Korea International Trade Association, and in 2000, he served as chairman of the Digital Economy Research Institute.
In 2004, he also worked as a member of the candidate screening committee for the 17th National Assembly of the Grand National Party (17th National Assembly). In 1999, he made his literary debut with the sijo "Longing" (그리움) in the winter issue of the sijo literary magazine. He is also a member of the Hapcheon Literary Association.456
From February 29, 2008, to February 9, 2009, he served as the first minister of the Ministry of Strategy and Finance, formed by merging the Ministry of Finance and Economy and the Ministry of Planning and Budget, and took on the role of the first economic leader of the Lee Myung-bak administration.
After leaving his post as Minister of Strategy and Finance on January 19, 2009, he served as special economic adviser to the President and chairman of the National Competitiveness Enhancement Committee.7 In 2009, he received the "2009 Proud NYU Alumni Award" (newly established in 2009) from the Korean Alumni Association of NYU in the United States (president Jang Dae-hwan).8
In March 2011, he assumed the positions of chairman of KDB Financial Group (KDB Financial Holdings) and president of the Korea Development Bank.
Value-added tax practitioner
While serving as a official in the Tax Bureau of the Ministry of Finance, Kang Man-soo was a practitioner responsible for the establishment of the value-added tax in 1977.9
Other major career
- Ministry of Finance: responsible for the introduction of the real-name systems for financial and real estate transactions and for the liberalization and opening of financial markets.
- Korea Customs Service: served as commissioner.
- Ministry of Trade, Industry and Energy: served as vice minister.
- Ministry of Finance and Economy: while serving as vice minister, the IMF crisis broke out, and he participated in negotiations over bailout funds and in the reorganization of the financial supervisory and central banking systems.
- Korea International Trade Association: served as full-time vice chairman and worked alongside Chairman Kim Jae-cheol (currently chairman of Dongwon Group).
- Seoul Institute: as president, he took part in research on major projects such as the restoration of Cheonggyecheon and the reorganization of the public transportation system.
Minister of Strategy and Finance
From February 29, 2008, to February 9, 2009, he served as the first minister of the Ministry of Strategy and Finance, formed by merging the Ministry of Finance and Economy and the Ministry of Planning and Budget, and took on the role of the first economic leader of the Lee Myung-bak administration. He led the planning of the economic motto of the Lee Myung-bak administration, "Korea 747" (annual growth of 7%, per capita national income of US$40,000 within 10 years, and achieving the status of the world's seventh-largest economic power), and immediately after the election, he served as the head of the first economic subcommittee of the presidential transition committee, helping to draft the economic policies of the new government. After leaving the post of Minister of Strategy and Finance in a cabinet reshuffle in February 2009, he assumed the position of chairman of the Presidential National Competitiveness Council (minister-level) on February 12, 2009.10 Chairman Kang received the "2009 Proud NYU Alumni Award" from the Korean Alumni Association of New York University (NYU) (president Jang Dae-hwan). The association stated the reason for the selection as: "He contributed to recording the fastest economic recovery among the member countries of the Organisation for Economic Co-operation and Development (OECD) through proactive and bold response measures against the global economic crisis."11
Exchange rate policy
- He advocated an exchange rate policy based on active government intervention.12 While pursuing a high exchange rate policy at the time, he was criticized for raising import prices and dealing a blow to the economy of ordinary people,13 and together with President Lee Myung-bak, he was sometimes called "Lehman Brothers".14
Tax cut policy
Income tax
- At his first official briefing after taking office, he announced a plan to lower income tax, stating, "Because many people in Korea do not pay earned income tax, rather than raising the tax-exempt threshold for income tax, we will adjust the burden of earned income tax by lowering the tax rate."15
Inheritance tax
- At his first official briefing after taking office, he suggested that he was considering lowering the inheritance tax rate, stating, "What matters more than whether inheritance tax is abolished or not is how the tax rate, etc. is (adjusted)." Earlier, at an official briefing, he had cited the recommendation of the International Monetary Fund that "countries that keep inheritance taxes will not be able to withstand capital flight."15
Corporate tax
- At his first official briefing after taking office, he announced a plan to lower corporate tax to increase corporate investment, and then at a meeting of heads of national tax offices, he stated that he would continuously lower corporate tax, which was at a high level compared with neighboring competing countries.16 On June 4, 2008, the Ministry of Strategy and Finance announced a legislative notice of a partial amendment bill to the Corporate Tax Act that lowers the corporate tax rate and raises the standard amount of the tax base,17 and a partial amendment bill to the Restriction of Special Taxation Act that adjusts the minimum effective tax rate for small and medium-sized enterprises.18
- There has been criticism that the corporate tax cut, while having the effect of inducing investment activation, could worsen fiscal soundness.19 In addition, in response to criticism that only chaebols and high-income earners would benefit, he argued that "since large corporations pay a lot of taxes, it is natural that they benefit greatly from tax reductions."20
Comprehensive real estate tax
- Kang Man-soo holds the conviction that the comprehensive real estate tax is an excessive tax that runs contrary to the spirit of the Constitution, and while in office, he actively pursued the easing of the comprehensive real estate tax.
Relationship with Lee Myung-bak
He first met 17th President Lee Myung-bak at Somang Presbyterian Church in 1981. Lee Myung-bak, an elder, had been active since the founding of Somang Church, but the two began their serious relationship in 2000, when Kang Man-soo served as a member of the Grand National Party's Future Competitiveness Committee. The chairman of this committee was Lee Myung-bak. In August 2005, while Lee Myung-bak was serving as mayor of Seoul, Kang Man-soo was appointed president of the Seoul Institute.21 In 2008, when Kang Man-soo lost his mother, Lee Myung-bak, even though he was serving as president, attended the funeral, which shows the depth of their relationship.22
Works
- Yankee Bonds as a New Financing Source for Korea (《한국을 위한 새로운 자금원으로서의 양키본드》) - master's thesis
- Korean Economy as Seen from the Field: 30 Years (《현장에서 본 한국경제 30년》), Samsung Economic Research Institute, 2005, ISBN 89-7633-257-1
In media
Footnotes