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SOLEMN VOW: Mr Lee at his inauguration yesterday. He wants South Korea to become one of the world's top seven economies. -- PHOTO: AP
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SEOUL - FORMER Seoul mayor Lee Myung Bak took office as South Korea's President yesterday, promising business-like pragmatism for Asia's fourth-largest economy.
Some 50,000 South Koreans from all walks of life, including schoolchildren, senior citizens and celebrities, gathered outside the National Assembly building amid freezing temperatures in Seoul to cheer their new leader.
'I wish him success in his quest to revive the economy,' said Mr Cho Yong Hun, 25, who is looking for a job.
Mr Lee - South Korea's 10th President - was mindful of the people's concern with job creation and spoke at length about boosting the economy in his speech, which was peppered with phrases such as 'advancement' and 'pragmatism'.
'Economic revival is our most urgent task. New engines of growth must emerge. The economy must grow vigorously and more jobs created,' he said in his inauguration speech.
The 66-year-old, who is a former chief executive of the Hyundai group's construction arm, also promised to cut corporate taxes. He said this will boost investments and consumption.
Currently, companies earning more than 100 million won (S$148,000) in taxable income are subject to up to 25 per cent corporate income tax.
South Korea's economic growth has stagnated at 4.4 per cent over the past decade.
Stiff competition from Japan and China, a looming US recession and surging oil and food prices may derail Mr Lee's promise to achieve average annual economic growth of 7 per cent.
On Sunday, seven out of 10 major securities firms in the country downgraded their growth forecasts for this year to below 5 per cent.
Mr Lee also promised more privatisation, deregulation and a greater push for free trade agreements, including with the United States.
A more immediate task for the new President will be to help his Grand National Party (GNP) capture more than half of the 299 seats up for grabs in the April parliamentary elections.
'Failure to do so will make it hard for the government to push through their policies,' said Sungkyunkwan University political science Professor Kim Il Young.
Currently, the main opposition United Democratic Party has 141 seats, compared to 130 held by GNP.
On foreign policy, the new President also promised a pragmatic approach during his single five-year term.
In his inauguration speech, the Osaka-born Mr Lee called for a stronger strategic alliance with the US, and better relations with China, Japan and Russia.
He later held talks separately with Japanese Prime Minister Yasuo Fukuda and US Secretary of State Condoleezza Rice, who were invited to his inauguration.
Mr Lee and Mr Fukuda agreed to resume top-level visits, which were cancelled following former Japanese leader Junichiro Koizumi's repeated visits to a war shrine. They also agreed to try to restart stalled free trade talks.
During talks with Dr Rice, Mr Lee pledged to work more closely with Washington to denuclearise North Korea.
A six-nation disarmament deal to end North Korea's nuclear programme is at an impasse because of disagreements over the North's promised declaration of all its nuclear programmes.
Mr Lee has vowed to demand more reciprocity from the North in return for aid from the South.
North Korea has made no comment on Mr Lee since his landslide win on Dec 19.
'North Korea is monitoring South Korea's policy towards it and is unlikely to respond well to a more assertive government,' said Professor Lee Sang Hyun, a security expert at think-tank Sejong Institute.
leeteejong@yahoo.com
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