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December 19, 2007 was in many ways special. Not only was it his birthday and marriage anniversary but it was also the day that Lee Myung-bak became the President of South Korea. The man who famously declared that he would take South Korea “from the periphery of Asia…into the centre of the world,” is currently grabbing headlines with his announcement that South Korea would suspend nearly all trade relations with North Korea.
Lee’s action was prompted by the March 2010 incident in which North Korea allegedly torpedoed a South Korean warship causing the death of 46 sailors. Known for his hardliner stance against North Korea, Lee has requested that the United Nations Security Council ‘punish’ his neighbor. North Korea has reacted saying that the reports are all ‘fabrications’ and has threatened a full-fledged war if the issue is pursued. And that is something Lee would want to avoid. Especially since the map he had drawn for South Korea’s future finally seems to be falling into place.
When Lee, nicknamed ‘the bulldozer’ for his ability to see projects to completion, took over the reins of the South Korean government he already had some plans in mind. Among the goals he chalked out for South Korea, the most well-known was the mysterious sounding “747 Plan,” which decoded, stands for the achievement of a 7% annual GDP growth, $40,000 per capita income and the title of the seventh largest economy in the world. But before Lee could make much progress on his strategy, the recession struck.
In a way, the recession came at the right time for Lee. Initially, South Korea was bogged down like most countries. The won plunged 30%, the nation was suddenly bereft of foreign investors, and the stock market plummeted, just three months after the crisis began.
Now the new President would have an opportunity to further showcase his organizational expertise. Lee, a former CEO and chairman of Hyundai Engineering and Construction, immediately put his sharp management skills to the task. A quick fix fund worth $200 billion was promptly set up to assist flailing banks and companies in paying their debts and for other emergency aid. Deals were struck to exchange currencies with major economies in order to plug the rapid depletion of foreign reserves. Cash was pumped into the economy, and within the first six months of 2009, South Korea’s $250 billion budget was 65% lighter. Consumer fears were allayed as the government assured job protection, while the Bank of Korea slashed interest rates by 3.25 percentage points to an all-time low of 2%.
Fortunately, South Korea already had a strong economy, recently entering the prestigious rich list of Organization for Economic Cooperation and Development (OECD). The country’s experience with the Asian Crisis in 1998 had ensured that it had a good corporate governance and financial management system. And aided by these government measures, it didn’t take long for the economy to begin breathing again. South Korea was the first from the OECD club to post a 0.4% growth as early as the third quarter of 2009 and this year the country’s GDP is expected to grow by 4.4%, the highest among OECD members. “Developing countries are eager to learn South Korea's economic model because of its relevance to them,” says Euh Yoon-dae, an economist at the Korea University to Newsweek.
“The South Korean economy is definitely in the recovery phase along
with the global economy,” said Lee Myung-bak in a meeting with
government officials.
Known to always confirm new plans with the question, “Will it work?” Lee is now beefing up South Korea’s image. On the climate change forefront, he has promised that South Korea will slash emissions by 30%, by far one of the biggest margins a country has promised. Abandoning its 60-year long manufacturing and export-oriented approach, President Lee Myung-bak said the government will promote “low carbon and green growth'' as the nation's new vision. Full-fledged efforts are on to promote the usage of English to further open up South Korea to a globalized world. Foreign investments and free trade are being welcomed with open arms, with Lee shunning the rigid and insular approach of his predecessors. South Korea’s social work abroad in countries like Africa has been stepped up. And with South Korea graduating from recipient of international aid to donor, the country gave away $1 billion in aid to several poor nations last year.
Currently, Lee’s biggest dream is to unite South Korea with the North. His vision is one where people of both the Koreas live in harmony and peace with an equal standard of living. During pre-election speeches Lee had declared that, “I will become a president who rebuilds the Republic of Korea and helps the people regain their lost smiles.” Will it work? Just ask the bulldozer.
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