S. Korea’s Park vows to rebalance export-led economy

Updated: Tuesday February 25, 2014 MYT 12:14:11 PM

S. Korea’s Park vows to rebalance export-led economy

SEOUL: South Korean President Park Geun-Hye unveiled Tuesday a three-year plan to rebalance the export-reliant economy, investing US$3.7bil on start-ups, boosting domestic spending and getting more young people and women in the workforce.

Park said the plan – announced on the day she completed her first year in office – would deliver a potential economic growth rate of least four percent by 2017.

“Our past… way of growth that made us one of the world’s 10 largest economies has now reached its limit,” Park said in a national televised speech.

Asia’s fourth-largest economy faces a widening imbalance with the export and manufacturing sector, led by all-powerful conglomerates, totally overshadowing the domestic consumer market and services industry, she said.

She also highlighted the dangers posed by what she described as South Korea’s “silent, looming disaster” – its rapidly ageing population that threatens to slash the workforce and impose a heavy welfare cost.

“Unless we change the fundamentals of the economy and break from the trap of slow growth, there will be no future for us,” Park warned.

The national economy grew 2.7% in 2013.

According to the three-year plan, the government will spend four trillion won (US$3.7bil) by 2017 to help small start-ups and increase spending on research and development to the equivalent of 5% of the GDP, from the current four percent.

It will also ease an array of regulations on five key service industries – healthcare, education, finance, tourism and software. While opinion polls have shown a healthy approval rating for Park after hew first year in office, she scores far higher marks for her foreign policy than her handling of the economy.

A series of surveys commissioned by leading newspapers have shown disapproval of her economic policy running at around 50%.

One of the largest-circulation dailies, the Dong-A Ilbo, compared her economic team to “a student who is full of motivation but knows little about how to study and ends up being an underachiever”.

Park, South Korea’s first woman president, came to office vowing more gender equality and her speech on Tuesday offered more childcare services for working mothers and incentives for companies that hire more women and young people.

“All aspects of our economy, including domestic spending and exports, manufacturing and services, big conglomerates and small and medium firms and the capital city and the rest of the country, should show balanced growth so that all South Koreans will be able to enjoy fruits of growth,” Park said. – AFP


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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