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Credit: Reuters/Hong Chan-Sun/Newsis By Jack Kim SEOUL | Sun Aug 8, 2010 3:04am EDT SEOUL (Reuters) - South Korean President Lee Myung-bak named a young reformist as prime minister on Sunday and replaced half his cabinet in a mid-term reshuffle aimed at pushing through his pro-business reform agenda. In an apparent vote of confidence in his government's handling of the torpedoing of a South Korean warship in March, which Seoul blames on North Korea, the defense, foreign and unification ministers retained their portfolios. Lee, 68, whose political momentum was recently revitalized when his ruling Grand National Party (GNP) won a surprising victory in parliamentary by-elections, named a 47-year-old former governor of a rural province, Kim Tae-ho, as prime minister. Prime ministers in South Korea traditionally take on a more bureaucratic and administrative role. Cabinet reshuffles occur frequently and often involve the prime minister. If Kim is successful he could emerge as a leading candidate in a 2012 presidential election. "We expect to expand the culture of change and reform with the youth and vigor meeting the expertise and experience of the existing cabinet," presidential spokesman Hong Sang-pyo told reporters. Lee also appointed a close political confidant and a veteran lawmaker, Lee Jae-oh, 65, as minister without portfolio charged with pushing through the president's stalled domestic agenda. Despite the president's own party having an overwhelming majority in parliament, Lee has failed to convince local and national politicians of the need to revitalize South Korea's four major rivers in a multi-billion dollar public works project. In June, parliament voted in favor of relocating government ministries and agencies to a yet-to-be-built city south of Seoul despite pleas from the president's office not to do so. That forced the resignation of the previous Prime Minister Chung Un-chan. "Generally speaking Lee Myung-bak's policies are market-oriented ... the cabinet members are very close to him and they will make a good team," said Yun Chang-hyun, of the University of Seoul. "I think that they are very loyal, and will follow the rules." BOOMING ECONOMY Lee also appointed a close ally of a political rival as agriculture minister in a move to reach out to opponents in his own party who had objected to his policy initiatives and slowed legislative agenda. Lee had made it a top priority for his government to create 200,000 jobs this year and vowed to clean up bureaucracy, cut taxes and reform the country's rigid labor market. South Korea has pulled out of the global financial crisis ahead of most others and has already been tipped to enjoy the fastest growth next to Turkey this year among members of the Organization for Economic Co-operation and Development. Asia's fourth-largest economy grew 7.6 percent in the first half of this year over a year earlier -- the fastest in a decade -- but growth is still led mostly by big exporting firms and the job market has yet to fully recover. The government is under pressure from critics and opposition lawmakers to persuade large companies to invest and hire more domestically and share more of their increased profits with their smaller domestic partners. (Additional reporting by Yoo Choonsik, Suh Kyung-min, Brett Cole and Jeremy Laurence; Editing by Jeremy Laurence) World South Korea Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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