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Lee: If You Want Investments, Build a Factory in 6 Months

Lee: If You Want Investments, Build a Factory in 6 Months

Posted February. 02, 2008 08:35,   


1. Thank you for giving me this opportunity. With the incoming government ready to launch in a few weeks, Koreans hold high expectations for a new Korea. Our government is expected to shift its focus from ideology to pragmatism. How will Korea change over the next five years? What exactly is this pragmatism?

The process of Korea’s industrialization and democratization has actually been quite short. Now, for the past ten years, Korea has suffered from ideological disputes, lagging behind other advanced nations. The incoming government will at least throw off ideological disputes. Cutting the ties with ideological disputes means the society becomes more pragmatic.

Korea’s per capita income hovers around 20,000 dollars. My goal for the next five years is to nurture Korea into an advanced society. Our nation will experience a change through which it will become more refined to match its economic prowess. Under my leadership, per capita income will reach 30,000 dollars, propelling Korea to become a truly economically advanced country. In the international community, Korea will carry out its duties to the fullest in a manner that represents its place in the world. In five years, we will truly become an advanced nation in terms of the level of support provided to underdeveloped countries.

Most of all, I think the Korean Peninsula will undergo significant change over the next five years. It is our hope that during this period, North Korea fully dismantles its nuclear weapons program, thus making the peninsula nuclear weapons-free. In terms of inter-Korean relations, we need to lay the foundation for the North to be economically self-reliant. If North Korea completely dismantles its nuclear weapons program and opens its market, the international community will provide the support necessary to make this happen. Moreover, South-North relations will normalize and Northeast Asia can face a new era of lasting peace.

3. (Asahi) Under the Roh Moo-hyun administration, relations between Korea and Japan have soured due to disputes over the Dokdo islet and differences over historical issues such as Japanese prime minister’s visit to the Yasukuni shrine. Talks between the two nations have stalled. What is your opinion over these historical disputes? What stance will you take in order to rebuild forward-looking bilateral relations? What are your expectations for Japan? How will you differentiate yourself from President Roh Moo-hyun regarding these key historical disputes?

Korea and Japan normalized relations long ago. Even though bilateral relations have developed considerably in terms of economic and private sectors, political relations have hardly improved. I think the case of Germany and France can be a good example for Korea and Japan. Scholars from the two European nations held discussions for five days and jointly compiled a history textbook that covered controversial issues. As in this case, the historical disputes between Korea and Japan can be handled by scholars as the two governments should take one step further. Being geographically located close together, I hope political leaders of our two nations can frequently meet and talk about key issues. I think shuttle diplomacy is good. It’s possible to go to Japan and come back to Korea on the same day. I think Korea and Japan will establish good relations which should benefit not only our two nations but also Northeast Asia.

Japanese Prime Minister Yasuo Fukuda’s policies place a priority on Asia. This will help the two nations establish mutually beneficial ties. I believe Japan, as the world’s second largest economy, will use proper diplomatic skills in its relations with Asian nations. I leave historical mistakes and related issues to Japan to work out on its own and will concentrate on moving ahead.

(Do you have anything to ask Japan in terms of historical issues?) I admire the economic and administrative reforms of former Prime Minister Junichiro Koizumi. But, I don’t think he did as good of a job in Japan’s relations with its neighboring countries such as Korea and China. As Prime Minister Fukuda has a more developed policy regarding relations with Asian countries, I think it would be better for Korea to seek the next level in the relationship, instead of making specific demands.

I hope Japan will not sacrifice international relations for domestic political gains.

4. (Dong-A) Easing regulations on the equity investment ceiling system. I heard that the incoming government will ease regulations during the February session of the National Assembly. Golf courses have frequently been cited as a typical case of being heavily regulated. I heard building a golf course requires 770 approvals. How much do you think the number of approvals will decrease? And, what’s your plan for easing regulations regarding the separation of financial and industrial capital?

It worries me that reports like these might appear in foreign media. If they do, no foreigners will want to invest in Korea. Certainly, Korean firms have strong financial structures. In the past, the government regulated cross-shareholding of conglomerates. At that time, the average debt ratio of Korea’s large corporations surpassed 300 percent. Currently, it has fallen to below 100 percent. Undoubtedly, Korea is one of the world’s best in terms of corporate financial structure. The debt ratio of Japanese firms is not low since they can borrow money from banks at low rates. Considering this, I think it’s the right time to deregulate. I believe it would be better to deregulate the equity investment cap as soon as possible. It will contribute to job creation and help smaller businesses to grow. It’s not true that abolishing the regulation benefits only large firms. And regarding the high number of approvals to establish a golf course, the number itself is not important if they can all be received in a single day. What mind boggles me is that, even if it is 1,000 approvals, the problem is that it takes two or three years to get all the approvals. I believe what we should reduce is not the number of approvals but the time required to get them. If it takes 39 months to establish a factory, that’s too long.