New S. Korea leader vows to fix economy

Lee Myung-bak was sworn in as South Korea’s 17th president today, calling for a renewed spirit of self-sacrifice and vowing to apply hardheaded pragmatism to governing a country where disparities in wealth have created “class conflict and animosity.”

“Economic revival is our most urgent task,” Lee declared in his inaugural address, which swung between clarion calls to create a more compassionate society and a lecture on how South Korea can remain competitive in a globalizing economy.

His presidency restores conservatives to the office after a decade of liberal rule. A onetime construction company boss who fashioned a political career as the green-conscious mayor of Seoul, Lee took office offering a new tone, more pro-business, less anti-American and tougher on North Korea than his predecessor.

But Lee’s ode to pragmatism also suggests that he is unlikely to take the country in radical new directions. He spent the eve of his inauguration tamping down suggestions that he might abandon the push for reconciliation with North Korea, insisting he will continue to expand the inter-Korean economic development projects that have become the cornerstone of South Korean policy over the last eight years.

The 61-year-old took the oath on a low stage in front of the National Assembly in Seoul. A crowd of about 50,000 turned out on a gray winter morning, U.S. Secretary of State Condoleezza Rice and other foreign dignitaries mixing with private citizens for a ceremony that featured folk choirs and break dancing.

But the fanfare of traditional horns could not drown out the fact that South Korea’s bitterly partisan politics have barely paused for breath.

Lee’s speech urged an end to “wasteful political disputes” that are alienating voters. But the two months since he won the presidency by a wide margin were shadowed by an investigation of his business ties to an alleged felon. The inquiry ruled last week that there was no evidence to implicate Lee in financial fraud.

He also assumes office amid a political storm over the wealth of his nominees to the 15-member Cabinet.

Lee has described his putative Cabinet as “the best of the best.” But critics have accused some of getting rich through real estate speculation. Lee Choon-ho, the nominee to be minister of gender equality and family, withdrew her name Sunday to ensure, she said, that questions about her property portfolio “do not become a roadblock” to the new administration.

Much of the political jockeying is linked to the impending elections for parliament in April, in which Lee is counting on a conservative majority to give him the freedom to pursue growth-oriented economics. He pledged to govern by the same leadership style he developed while chief executive of Hyundai Construction Co. during South Korea’s era of turbocharged industrialization.

Voters elected Lee in hope that he can deliver on pledges to fix an economy mired in sluggish growth. Many South Koreans have become frustrated by growing disparities in wealth and a savage real estate market that has pushed the goal of homeownership beyond their reach.

Lee has vowed to deliver 7% annual growth and a $40,000 average annual income and make South Korea the world’s seventh-largest economy within a decade.

He also used his speech today to set a target of helping North Korea achieve an annual per capita income of $3,000, arguing that raising living standards in the dictatorship provides the best route to reuniting the two Koreas.

But it remains uncertain what Lee’s vaunted pragmatism means for relations with the North. He had planned to abolish the Unification Ministry, which oversees relations with the government in Pyongyang and has been the bane of conservatives who saw it as a hotbed of apologists for Kim Jong Il’s dictatorship.

But when opposition to that move proved fierce, the incoming president responded by nominating hawkish university professor Nam Ju-hong as the next minister. Nam has been one of the harshest critics of rapprochement between the Koreas.

bruce.wallace@latimes.com

Special correspondent Jinna Park contributed to this report.