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South Korea's Park offers a fresh start but scant detail in budget debut
November 18, 2013 / 7:58 AM / in 4 years

South Korea's Park offers a fresh start but scant detail in budget debut

SEOUL (Reuters) - South Korean President Park Geun-hye used her debut speech in parliament, nine months after taking office, to call a fresh start in Asia’s fourth largest economy as she urged legislators to pass her first budget.

South Korean President Park Geun-hye delivers her speech on the government's 2014 budget proposal, during a plenary session at the National Assembly in Seoul November 18, 2013. REUTERS/Kim Hong-Ji

The country’s first woman president, elected in December last year and in office since February, again outlined her vision of a “creative” economy and a country “where every person can be happy” but failed to announce any meaningful measures.

“In order to take advantage of the signs of economic recovery, we made economic stimulus and job creation as the highest priority of this year’s budget,” Park told MPs.

The budget numbers themselves were presented in September and spending will rise 2.5 percent in 2014 to 357.7 trillion won following a 7.2 percent increase in 2013.

Park appears to have made foreign visits rather than the domestic economy the focus of her first months in office. She has visited China, the United States, Britain and France and last week received Russian President Vladmir Putin.

Her domestic priorities are less clear. Her one major pledge -- to boost pensions -- was withdrawn and there are few signs she is tackling the regulation that shackles small businesses or the inability of graduates to find full-time jobs.

While South Korea’s economy largely escaped the global financial crisis unscathed and grew at a respectable 2.4 percent so far this year, it remains heavily dependent on large export conglomerates to drive that growth.

Park’s budget comments came after China last week announced the most sweeping changes to economic and social policy in three decades in a bid to energise its sputtering economy, while Japan too is pushing ahead with reform.

South Korea’s population is ageing more rapidly than any other and retirees are crowding out younger people from the job market in response to poor social safety programmes.

More than one in three South Koreans will be aged 65 or older in 30 years, versus one in eight now.

“The public has yet to see a detailed roadmap on how this government will generate (long-term growth) momentum through its policies on the creative economy,” said Lee Sang-jae, an economist at Hyundai Securities in Seoul.

Slogans promoting the “creative economy” and “national happiness” helped Park win a closely-fought presidential poll.

Park is enjoying a stable and high approval rate of more than 50 percent but political analysts have said her popularity was attributable more to the disappointing performance of the opposition parties and tensions with North Korea.

South Korea’s economy is expected to post annual growth of 3.8 percent next year up from a forecast 2.8 percent this year, according to the central bank.

($1 = 1063.4500 Korean won)

Additional reporting by Se Young Lee, Ju-min Park, Jack Kim; Editing by David Chance and Eric Meijer

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