South Korean President vows to rebalance export-led economy

FE Team | Published: February 26, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

SEOUL, Feb 25 (AFP): South Korean President Park Geun-Hye Tuesday unveiled a three-year plan to rebalance the export-reliant economy, investing $3.7 billion in start-ups, boosting domestic spending and getting more young people and women in the workforce.
Park said the plan -- announced on the day she completed her first year in office -- would deliver a potential economic growth rate of at least four per cent by 2017.
"Our past... way of growth that made us one of the world's 10 largest economies has now reached its limit," Park said in a national televised speech.
Asia's fourth-largest economy faces a widening imbalance, with the export and manufacturing sector -- led by all-powerful conglomerates -- totally overshadowing the domestic consumer market and services industry, she said.
Park also highlighted the dangers posed by what she described as South Korea's "silent, looming disaster" -- its rapidly ageing population that threatens to slash the workforce and impose a heavy welfare cost.
"Unless we change the fundamentals of the economy and break from the trap of slow growth, there will be no future for us," Park warned.
The economy grew 2.7 per cent in 2013.
According to the three-year plan, the government will spend four trillion won ($3.7 billion) by 2017 to help small start-ups and increase spending on research and development to the equivalent of five per cent of GDP, from the current four per cent.
It will also ease an array of regulations on five key service industries -- healthcare, education, finance, tourism and software.
In an attempt to spur domestic spending, the plan also aims to build more new homes and offer low-interest loans for families desperate to enter the property market.
South Koreans' household debt -- mostly housing loans -- amounts to nearly 140 per cent of their disposable income on average -- one of the highest rates in the world.