Park Geun-hye

Park Geun-hye's biggest challenge will be South Korea's economy

PUBLISHED : Friday, 21 December, 2012, 12:00am
UPDATED : Friday, 21 December, 2012, 2:39am

Park Geun-hye is the first female president of a country where women are under-represented in politics and executive ranks and underpaid in the workplace. So South Korean women have a stake in her pledges on big issues inherited from male predecessors, such as expanding social welfare for an ageing population, boosting employment, reducing the income gap and curbing the power of the chaebols, the family-run businesses that have increased their dominance. This means her biggest challenge will be management of the economy, which has fallen to its slowest rate of growth for three years on a quarterly basis.

South Korea joins Thailand, India, Pakistan, Bangladesh and Sri Lanka as Asian nations that have or have had women leaders. More significantly for north Asia, it is the fourth pivotal nation in a year to choose a leader steeped by ancestry in regional conflict. The first was rogue nuclear state North Korea. Kim Jong-un, the third generation of a postwar dynasty, gave South Korea's next leader an advance welcome with a rocket launch in defiance of UN resolutions. Its main ally, China, has a president-in-waiting, Xi Jinping , who is the son of a revolutionary hero of a party that fought the Japanese. Japan's new prime minister, Shinzo Abe, the son of a wartime cabinet minister, has reasserted Japan's claim to islands in the East China Sea, also claimed by China. And Park, an experienced politician in her own right, is the daughter of former military dictator Park Chung-hee, a polarising security hardliner.

The new generation of leaders, therefore, embodies the historical potential for conflict over issues that call for peaceful dialogue, for the sake of regional stability. In this regard, Park's policy of openness to dialogue with North Korea, subject to progress on nuclear dismantlement, is to be welcomed.

Her priority, however, remains the economy. Household debt, which stood at 85 per cent of gross domestic product last year, is weighing on personal income. Comparatively low government tax revenues hamper plans to improve social welfare, also low by the standards of other developed countries. As a result, reform of the chaebols, seen to disadvantage both consumers and investors, is popular with voters. But it will have to be reconciled with dependence on them for growth in Asia's fourth-biggest economy, since they account for more than half of economic output, and are key to exports that contribute more than half of GDP.