Lee: market should evolve

President Lee Myung-bak said Monday South Korea should seek a new model of the market economy that puts more of its focus on sharing benefits of economic growth between rich and poor. The appeal, made in Lee's Liberation Day speech, is in line with Lee's "fair society" campaign and indicates that he is likely to put his policy focus on caring for ordinary people during the remainder of his term that ends in early 2013. "The existing market economy must evolve," Lee said during a ceremony to mark Korea's liberation from Japan's 1910-45 colonial rule. "What is now being demanded is a new model of the market economy that evolves from greedy management to ethical management, from the freedom of capital to the responsibility of capital, and from the vicious circle of the rich getting richer and the poor getting poorer to mutual prosperity." Lee made the plea, saying the world economy faces a string of problems such as the global fiscal crisis, food and energy crises; soaring consumer prices; and the wide gap between the rich and poor and unemployment. He added that a "new way of thinking" is needed to solve the problems and build a world of peace and prosperity. "When it come to progress, quality is as important as quantity," Lee said. "Such progress should not widen the gap but narrow it. Instead of jobless growth, it has to help create more job opportunities. It has to be conducive to building a warm society where people take care of one another." Lee called such progress "ecosystemic development." South Korea's welfare budget this year stands at 86 trillion won (US$80 billion), the highest amount ever, and the government needs to increase the budget to provide necessary benefits as South Korea is transforming into a "super-aged society," Lee said. Still, Lee made clear his opposition to welfare populism. "In some countries, competitive welfare populism by lawmakers brought about national bankruptcy. We have to avoid repeating the same mistakes. If the state budget is depleted, it would be impossible to continue implementing welfare policies," he said. South Korean lawmakers have put forth a series of costly welfare policy proposals in attempts to woo voters ahead of next year's parliamentary elections. Lee has been critical of such moves, saying those proposals could devastate government finances and lead to national bankruptcy. "We should not make the error of giving financial aid to those who are well off, thus preventing such assistance flowing into the hands of those in desperate need," Lee said. "We have to remain vigilant so that policies formulated for present convenience do not become an unmanageable burden for future generations." Lee also pledged to do his "utmost to realize a balanced budget" until his term ends. The Federation of Korean Industries, the largest business lobby in South Korea, said in a statement that it agrees with Lee on the need for shared growth and fiscal health, saying it would do its best to expand investment, create jobs and work toward shared growth with smaller firms. On tensions with Japan, Lee urged the neighboring nation to teach its future generations a correct history. "Japan has a responsibility to teach its young generation the truth about what happened in the past. By doing so, we can allow young people in Korea and Japan to forge ahead into the new era with a correct recognition and understanding of history," he said. Relations between Seoul and Tokyo have soured recently after Japan renewed its territorial claims to South Korea's easternmost island of Dokdo. South Koreans see those claims as a sign that Japan has not fully repented for its colonial rule of Korea Seoul has rejected Japan's claims over Dokdo as nonsense because the country regained independence from the colonial rule and reclaimed sovereignty over its territory, including Dokdo and many other islands around the Korean Peninsula. Later in the day, senior presidential spokesman Kim Du-woo said that Lee can visit Dokdo at any time, though various factors should be taken into consideration before making a decision to visit the islets. "The president of the Republic of Korea can visit the country's territory at any time," he told reporters. "Lee's visit to Dokdo would have no problem." Lee's address included no surprise proposals to North Korea, only stressing the importance of the two sides to build mutual trust toward an era of peace and prosperity, and urging the communist nation to end provocations against the South. "Over the past 60 years, the South and North have lived in conflict. Now is the time to overcome it and open up an age of peace and cooperation," Lee said. "To this end, it is incumbent for the two sides to build up mutual trust with responsible deeds and a sincere stance. Nothing can be accomplished through provocations." Lee also appealed for ratification of the free trade agreement with the U.S., saying it will be a great boon for South Korea's economy and for the country's alliance with Washington. "If we lose more time, we may lag behind competing nations. The government has prepared remedial measures to address some relevant issues," Lee said. "The treaty must be ratified for the future" of South Korea.