Conservative rides high on S Koreans' hope for change

PUBLISHED : Monday, 17 December, 2007, 12:00am
UPDATED : Monday, 17 December, 2007, 12:00am

Conservative candidate Lee Myung-bak looks set to win South Korea's presidency with a landslide in Wednesday's election - the last polls before the ballot gave him ratings of more than 40 per cent, while liberal rival Chung Dong-young mustered only 15-17 per cent.

Mr Lee has chosen to fight the election for the Grand National Party on the economic battlefront. 'Economy First!' his website cries, and a popular advert shows him at a street market, listening to an elderly woman telling him to prioritise the economy. Born into a poor family, Mr Lee worked in markets to put himself through university.

Other ads stress his 'can do' track record and successes, notably as CEO of Hyundai Engineering and Construction in the 1980s and as mayor of Seoul from 2002 until this year.

Ironically, the economy has performed well under President Roh Moo-hyun, with gross domestic product growing at an average of about 4.5 per cent a year. But this is not the impression one gets from the powerful conservative press. The top three dailies, all with circulations of more than 2.5 million, have been rabidly anti-Roh.

The president has even complained publicly that foreign investors had benefited more from the surging stocks - the main index has tripled under Mr Roh's five-year administration - than have Koreans, who had been dissuaded from investing by doomsaying media.

However, during Mr Roh's administration, taxes have risen across the board, and the government has been unable to rein in real-estate speculation in hot spots such as southern Seoul.

'I think you have got one of those situations where the macroeconomy has not performed badly, but with increased taxation, and one or two ill-conceived policies, people don't feel that their lives have got better,' said Mike Breen, author of The Koreans. 'So they are voting for change.'

Change is what Mr Lee insists he can deliver. His promise, branded 'Vision 747', is lofty. He says he will reinvigorate GDP growth rates to 7 per cent levels, which is where they were in the 1980s. Moreover, he will raise Koreans' per capita GDP to US$40,000 - more than double the present rate. And if that is not enough, he will make South Korea, the world's 11th-largest economy, the seventh biggest.

Whether these goals are realisable is unclear, but Koreans have responded favourably to his ambition.

Mr Lee paints himself as pro-business and has vowed to examine firewalls between commercial and financial capital. If these are removed, it could pave the way for the country's giant conglomerates, or chaebol, to own banks, a prospect that alarms financial analysts.

However, some believe Mr Lee is the man to rein in the conglomerates. 'I think he will be more careful with the chaebol,' said columnist Shim Jae-hoon. 'He knows them from inside, and he will want to expunge any idea that he is pro-chaebol.'

Mr Lee's fondness for big engineering projects has earned him the nickname 'The Bulldozer'. He has vowed to dig a canal from Seoul, in the country's northwest, to the port of Pusan, in the southeast. The plan as well as improving intra-Korean logistics would, it is hoped, ignite investment in rural regions.

He also aims to cut public spending, taxation and regulation. He supports the Korean-American Free Trade Agreement negotiated this year and awaiting ratification in both countries, and is expected to get tough with South Korea's notoriously militant unions.

He says he will increase investment and aid to North Korea, but only on condition that it verifiably abandons its nuclear programmes.

Mr Lee has been in a range of political and financial scandals. He was absolved this month of involvement in a financial scam, but yesterday Mr Roh asked the justice minister to consider reopening the investigation. A decision will be made today. 'Even though he has some problems, he has the capacity to boost the economy,' said Kim Sae-won, a social-science lecturer and columnist who says Mr Lee has her vote.

Additional reporting by Agence France-Presse