Same Old...
FT's Song Jung-a is skeptical about ROK President's Lee Myung-bak's magical powers to influence the South Korean economy.
Although some analysts doubt whether the new president can make good on his bold promises, especially as the slowing US economy threatens to curtail demand for South Korean cars and mobile phones, Mr Lee remains confident that growth will accelerate from 5 per cent last year to 6 per cent this year.
By increasing inputs of labour and capital, Mr Lee added that he could boost Korea's potential rate of growth to 7 per cent within a decade.
Mr Lee dismissed claims that he would favour the country's chaebol as he tries to revive the economy. «The government believes that big companies have to continue to develop themselves while small and mid-sized companies should be made healthier so they have their own competitiveness,» he said.
But Mr Lee has introduced measures that will make life easier for corporate giants such as Samsung, LG and Hyundai.
In addition to his plans to scrap the restriction on conglomerates owning banks, ending a regulation intended to ensure the stability of the financial sector, Mr Lee's government last week said it wanted to adopt «poison pill» and multiple voting rights measures to protect South Korean companies from hostile takeovers.
The justice ministry cited a «foreign funds' hostile M&A threat» against SK Corp and KT&G – which were targeted by Dubai-based Sovereign Asset Management and US billionaire Carl Icahn respectively – as evidence of the need for such legislation.
Keep foreigners out, keep chaebol supreme...what has changed?
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