South Korea's incoming president focused on economy

South Korea's new president takes office next week, pledging to use the skills honed during his days as a leading businessman to lift the economy into the world's top seven.

But the ambitious campaign promises that helped Lee Myung-bak to a landslide win in December's election, and ended a decade of liberal rule, face major challenges from a slowing global economy and ferocious competition from powerful neighbours.

The former construction company CEO will be inaugurated on February 25 in front of an audience including Japanese Prime Minister Yasuo Fukuda and U.S. Secretary of State Condoleezza Rice.

Lee's victory was never really in doubt, attributed in large part by analysts to widespread disillusion among voters with the outgoing liberal government of Roh Moo-hyun, who was seen as a lacklustre leader of the world's number 13 economy.

The incoming president has also vowed to be tougher than his predecessor with North Korea if it continues to resist international pressure to dismantle its nuclear threat, but to reward it handsomely if it complies.

"I will repay you by exerting all my efforts in sincerely caring for you and reinvigorating the economy," a relieved Lee was quoted this week as saying after investigators cleared him - for the second time - of fraud allegations.

Lee, 66, moved to politics after a prominent career as a CEO of the construction arm of the giant Hyundai conglomerate.

A stint as mayor of Seoul - which with its satellite cities is home to half South Korea's population - won him a reputation as a go-getting leader able to push through big projects on time.

"His hobby is work," said one academic who works in the Lee camp.

RAGS-TO-RICHES

A father-of-four, Lee's rags-to-riches life story was featured in two hit TV dramas about business heroes who raised the country out of the ashes of the 1950-53 Korean War.

He is committed to dismantling the bureaucracy that big business groups say is throttling them and to making it easier for foreign investors to try their luck in South Korea.

"We hope the new government will move away from a regulator's approach to a business-friendly stance," said an executive at one of South Korea's leading conglomerates, or chaebol.

"In the end, we are in a country that makes its living with exports and chaebol are the main exporters."

Big business argues it has been penalised by the outgoing government's focus on trying to raise up society's have-nots, many still trying to pull themselves out of the hole left by the financial crisis that swept through much of Asia 10 years ago.

Lee has had a bumpy ride since winning the election, clashing early on with one of the main labour unions and teacher groups.

He has also had settle for a compromise over his proposed cabinet after a fierce challenge from liberal MPs who still dominate parliament.

That is a situation Lee hopes will change in the April parliamentary election, when his conservative party is tipped to win a majority that will give him the political muscle to push through new policy.

While many in the business sector hope the radical changes promised by Lee will make their life easy, economists warn that the global economic slippage will make it much harder to reach the high growth targets he is offering.

And one analyst said Lee may need to soften his hard-nosed approach and not try to railroad through his policy changes, noting that latest opinion polls show his approval rating well below recent predecessors just before they took office.

"The problem is, the incoming government is focusing too much on results, speed and performance," said Hahm Sung Deuk of the Korea University Department of Public Administration.

"Of course speed is important, but the most important thing is democratic procedures and values. The people may have put an emphasis on the economy during the election but that does not mean you can disregard political values."