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Lee seeks more private investment

South Korean President Lee Myung-bak, left, salutes the national flag during his inauguration ceremony yesterday in front of the parliament in Seoul. PHOTO: AP

South Korean President Lee Myung-bak, the nation's first president with a business background, pledged to cut taxes and speed up deregulation to encourage investment and boost economic growth.

"Unnecessary regulations will be either cast away or reformed as early as possible," Lee said in his inauguration speech in Seoul yesterday. "We must lower taxes as well. Only then will we see investments and consumption increase once again."

After winning a landslide victory on Dec. 19, the former Seoul mayor, 66, has to live up to a campaign promise to increase South Korea's economic growth to 7 percent and double per capita income to US$40,000 by 2017.

Lee is "obviously hoping that his can-do attitude, deregulation and other measures will bring in investment," said Kang Chul-kyu, an economics professor at University of Seoul, and a former chief of the Fair Trade Commission.

The new administration will "create an environment where entrepreneurs can invest freely, and our companies can roam the world market with much excitement," Lee said.

Lee, nicknamed the "Bulldozer" while running Hyundai Engineering & Construction Co, had previously announced a plan to make housing more affordable, his intention to shrink government by merging ministries and a program to improve the English- language skills of students.

The president is banking on non-government investment to fund housing loans and a 16 trillion won (US$16.8 billion) project to build a "Great Waterway," a network of canals through South Korea and branching up to the North Korean capital of Pyongyang.

Asia's fourth-largest economy expanded 4.9 percent last year from a year earlier, and Lee is aiming for growth of about 6 percent this year, higher than forecasts by the Ministry of Finance and the Bank of Korea.

The Great Waterway, which would begin with a 20km link between two rivers, will ultimately become a 2,100km waterway from Busan to Seoul. Lee says he would extend it another 1,000km north from the demilitarized zone if North Korea fulfills its pledge on dismantling nuclear weapons.

Lee's former firm is among those that have met to plan the project.

Lee and his Grand National Party also face the challenge of increasing trade with allies and neighbors. He will encourage the National Assembly to ratify a free-trade agreement with the US signed last June.
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