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Top Advisor Says South Korean President Will Deregulate and Reform Economy


The top economic advisor to South Korea's newly elected president Lee Myung-bak, who is currently in Washington, says the new government is committed to an ambitious economic agenda or deregulation and privatization. VOA's Barry Wood reports.

Il SaKong, special economic advisor to President Lee, told an audience at the Peterson Institute Friday that South Korea wants faster economic growth and increased foreign investment. He said that the new conservative leader, who began his five-year term in February, is determined to be a business-friendly president. Korea's complicated tax structure, he said, will be simplified and corporate taxes reduced.

"We are set to simplify major tax laws. At the same time, for foreign investors in particular, all new and existing relevant tax laws will be available in English. We didn't have that before," he said.

In addition, said Sakong, there will be far-reaching education reform that stresses competition and school autonomy. More work opportunities will be made available to women. Contentious relations between business and labor will be changed. The rule of law, he said, will be strictly enforced.

Economic relations with North Korea, emphasized during the past five years, are not a priority for President Lee. Sakong did express worry about food shortages in the north and the impact of sharply higher world rice prices.

"Since agricultural product prices went up, I suppose the food assistance programs going to the north will be affected by it. I suppose each (donor)country has certain budgets for giving foods, but as the rice price goes up the quantity has to be reduced," he said.

Rice prices have doubled in just the past few months.

Jeffrey Schott, a researcher at the Peterson Institute, says Sakong is right to focus on boosting Korean productivity to compete with other Asian exporters. "You can't stand still. You've got to continue to improve and improve your productivity in order to remain competitive. And that is particularly true in his own neighborhood when you've got China on one side and Japan on the other," he said.

Sakong advocates closer economic ties with the United States as well as with East Asia. He said he particularly wants to reverse the trend of South Korea attracting relatively low levels of foreign investment.

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