Connect to share and comment

S. Korea's new leader warns powerful conglomerates


South Korea's new president hinted strongly Monday that she would seek to rein in the powerful conglomerates that dominate the national economy and have been accused of stifling innovation.

Park Geun-Hye made the domestic economy the focus of her inaugural speech as she was sworn in as South Korea's first female president in a ceremony in Seoul.

The daughter of the late dictator Park Chung-Hee, Park took aim at the giant family run corporations, or "chaebols", that were nurtured by her father as the motors of South Korea's economic growth.

There have been growing calls to reform chaebols such as Samsung and Hyundai whose interests have expanded into almost every sector of the economy, and whose financial clout has smothered smaller competitors.

"I believe strongly that only when a fair market is firmly in place, can everyone dream of a better future and work to their fullest potential," Park said in her speech.

"By rooting out various unfair practices and rectifying the misguided habits of the past which have frustrated small business owners ... we will provide active support to ensure that everyone can live up to their fullest potential," she said.

There is a widespread public perception that the chaebols have monopolised the benefits of economic growth but hi-tech firms such as Samsung have raised South Korea's profile abroad with their innovations in electronics and mobile computing.

Park, who belongs to the ruling conservative party, had pushed the need for chaebol reform during her campaign, but in far less aggressive terms than her main left-leaning challenger Moon Jae-In.

While promising to put the chaebols on a tighter leash, Park had warned against any drastic reform, arguing that it would impact the economy at an already difficult time.

"In order for a creative economy to truly blossom, economic democratisation must be achieved," Park said Monday.

Promising to build a new "creative" economy, Park signalled extensive support for science and and information technology industries, calling them her "key priorities".

"I will raise our science and technology to world-class levels," she said, pointing to the creation of a "Ministry of Future Planning and Science" tasked with running the programme.

Once an economic juggernaut that grew nearly 7.0 percent a year on average since the end of the Korean War in 1953, South Korea has, in recent years, entered a phase of more measured growth.

Asia's fourth-largest economy is heavily dependent on exports and has been hit by the global slowdown in key markets, at a time of growing public frustration with a widening income gap and a lack of welfare.

"No citizen should be left to fear that he or she might not be able to meet the basic requirements of life," Park said, promising a "new paradigm of tailored welfare" for the aged and unemployed.