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  • Dec 29, 2014
  • Updated: 1:27pm

Into the fray

PUBLISHED : Saturday, 22 December, 2007, 12:00am
UPDATED : Saturday, 22 December, 2007, 12:00am

South Korean president-elect Lee Myung-bak has pledged a new era of economic reform and close scrutiny of aid to North Korea. He has a long career, in business and politics, of making good on his promises. But he also faces opposition from liberals and leftists, who first want to embarrass him in a non-stop corruption scandal and then frustrate his plans.

That juxtaposition of forces sets the stage for what may be one of the more dramatic periods in South Korea's long history of political turmoil tinged with violence and revenge. For Mr Lee, the drama will begin early in the new year, when a special prosecutor begins to look into his link to a mysterious investment fund named BBK. Its major investor and partner faces trial for stock manipulation, fraud and embezzlement. Mr Lee denies anything to do with the fund, but a seven-year-old video does show him boasting that he is BBK's boss.

The tape may well simply be a picture of a super-salesman businessman trying to convince investors about a product with which he has only a passing connection. And if Mr Lee had a lot more to do with the fund, through a couple of other companies that he was running, he may have pulled out before his partner began siphoning off the money and misleading investors.

But don't try to tell that to Mr Lee's foes; they see him as a gangster-like figure mired in corruption and nepotism, and sure to favour the conglomerates, or chaebol, that still dominate the economy. Mr Lee is a hardliner, they say, who is likely to frustrate a decade of former leader Kim Dae-jung's 'sunshine policy'.

The reluctance of Mr Kim's successor, Roh Moo-hyun, to veto the bill for the special prosecutor means Mr Lee's foes can cling to the slender hope that he will be indicted - and won't be sworn in as president on February 25. The result would be a call for another presidential election - and a political power struggle that could destabilise the country before Mr Lee has a chance to fulfil his dream of '7-4-7'. That is, 7 per cent annual economic growth, US$40,000 annual per capita income, and elevating South Korea's gross national product from 11th or 12th to seventh among nations.

Mr Lee's promise to revitalise the economy was the dominant issue in the election campaign. He argued for easing rules and regulations on the chaebol, which would then begin to invest much more creatively than in recent years. This would fuel an economic surge that, he says, will enable the economy to add 2 or 3 percentage points to the current growth level of 4 per cent to 5 per cent a year. While those statistics may seem fine by some standards, South Korean economists say they are below the world average - and way below that of China's economy, which is seen as threatening South Korea in its big three industries of shipbuilding, motor vehicles and electronics.

Mr Lee brings extraordinary credentials to his vision of the economy. Now 66, he became chairman of Hyundai Engineering and Construction at the age of 35 when it was the 'mother company' of the mighty Hyundai empire. He forged projects around the world, notably in the Middle East, before resigning, serving in the National Assembly and then, in 2002, getting elected to a four-year term as mayor of Seoul. There he revamped traffic patterns and brought new life and warmth to the city centre.

Amid all these accomplishments, he did not talk a lot about North Korea other than to say that Pyongyang had to give up its nuclear weapons programme as a prerequisite for aid. On the day after his election triumph, however, he took that simple viewpoint a significant step further, by saying he also planned to raise the topic of human rights in North Korea.

This may seem like a simple position. But it means that, as president, he would do away with the convenient rationale always offered by Mr Kim and Mr Roh for remaining silent on North Korea's human rights abuses. They always argued that South Korea had to reconcile with the North before pressuring the North's leader, Kim Jong-il, to go easy on his own people.

Mr Lee offered an interesting touch of history to explain his stance: the South began to improve its own human rights record in the era of military-led quasi-dictatorship only after severe pressure for reform, much of it from abroad. Similarly, said Mr Lee, now is the time to call for reform in North Korea. He couched this observation with an interesting term; he would raise the topic 'with affection'.

It's easy to imagine the North Korean response. If he makes good on his human rights promise, the process of inter-Korean reconciliation will be in trouble; the North refuses to countenance any mention of 'human rights' and denies claims of abuses.

Mr Lee, however, is basically a builder. He will want to pursue projects for bringing new industry to the North, by building ports and improving the transport system, as agreed by Mr Roh and Kim Jong-il in October's inter-Korean summit. He may talk tough, and he will demand 'verification' of what Pyongyang says it is doing to dismantle its nuclear programme.

In the end, though, he sees Korea as uniting through projects - more construction and industry in both the South and the North. His presidency, assuming he manages to get over the hurdle of the BBK investigation, will usher in a new and potentially exciting era.

The miracle will be if he is able to realise his dreams without violent opposition to his rule from the South - and the risk of a violent response from the North.

Donald Kirk is the author of two books and numerous articles on Korea for newspapers, magazines and journals

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