During his three years in office, President Lee Myung-bak is praised for achieving a rapid recovery from the financial crisis and boosting Korea’s economic clout in the world.
His government has widened Korea’s free trade relations with major economies, mediated conflicts between traditional and emerging powers as the first host of G20 Summit and pulled off 6.1 percent growth last year to rank second among Organization of Economic Cooperation and Development member nations.
Comprehensive and timely stimulus measures delivered at the height of the financial crisis are regarded as a major achievement that lubricated the market in tight credit squeeze. In 2009, the economy had lost more than 72,000 jobs and posted a mere 0.2 percent growth. The economy was quick to rebound in 2010, returning 320,000 jobs. The export sector picked up on the government support, reversing a 14 percent drop in 2009 to a 28 percent growth in 2010. The $42 billion of trade surplus from last year is by far the highest ever recorded.
In 2008, the government injected a $100 billion guarantee on the foreign currency borrowings of local banks and arranged $90 billion swap lines with the U.S., Japan and China. These not only pumped much-needed credit into the market but also provided relief to foreign investors who had doubts about Korean policymaker’s capacity to handle external shocks.
Lee approved a $23.3 billion stimulus package, a $20 billion bank recapitalization fund and a $10 billion for the bond market. The Lee administration is also credited for extensions on loans taken by small and medium enterprises.
Lee’s team solidified the financial soundness of the state by raising fiscal reserves. Mindful of the credit squeeze during the Asian Financial Crisis in 2007-08, the government increased dollar reserves to $270 billion, up from a mere $8.9 billion in 1997.
The international community attributes the country’s quick rebound from the recession to Lee’s business experience in the private sector.
“I think his useful in experience as a businessman very much helped his role as the president,” Mahathir bin Mohamad, former Prime Minister of Malaysia said at a Seoul forum Thursday.
“You have a leader who understands business and he hasn’t changed very much (from a business-friendly mindset). A combination of his position, that authority, and past experience, (would be) very good for Korea,” he said.
Before Lee entered politics in 1992, he served as CEO in eight different Hyundai Group subsidiaries, including Hyundai Engineering. Lee took the office in 2007 and pledged the revitalization of the economy as one of his key policies. Although the economy failed to deliver on Lee’s campaign promise, known as the “747 pledge” ― 7 percent growth, a per capita income of $40,000 and the world’s seventh-biggest economy ― the fast recovery earned respect from the international community.
Credit rating agency Moody’s in April raised Korea’s sovereign rating from A2 to A1, returning the level Korea had before the financial crisis.
The Lee administration faces daunting tasks in the remaining two years of his term, including the balancing of the multi-speed growth between rich and poor.
The president said Tuesday that the administration does not need to attach special meanings to the third anniversary of its term especially as it faces pressure to fight inflation and the spread of foot-and-mouth decease.
Lee vowed to continue his efforts to improve the livelihoods of citizens and raise the brand value of Korea in the international community.
“Cabinet members should be well aware of the situation that low and middle-income people are suffering greatly due to various problems such as inflation, (rising) rent costs and the (contamination from livestock) burial sites,” Lee was quoted as saying.
By Cynthia J. Kim (email@example.com