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President Lee's 747 Plan Grounded

Published: 05 Nov 2009 18:20:24 PST

The government seems to have given up on President Lee Myung-bak's ``747'' plan geared toward boosting the Korean economy to rank among the world's top during his tenure.

``The 747 Plan'' was a political buzz-phrase of President Lee, who promised to rack up an average of 7 percent economic growth and achieve a $40,000 gross domestic product (GDP) per capita so that Korea could become one of the world's seven largest economies.

Last year, when the CEO-turned-President was inaugurated, Korea chalked up a GDP growth rate of a mere 2.2 percent, which was more than halved from 5.1 percent in 2007 due mainly to the unprecedented financial crisis.

The national output is highly likely to contract around 1 percent this year compared to 2009 even though Asia's fourth-largest economy has shown clear signs of recovering from the financial turmoil.

Things are unlikely to change drastically during the term of Lee, whose tenure will finish in early 2013, according to the Ministry of Strategy and Finance (MOSF).

In a recent report, the ministry predicted 4 percent growth in national outputs for next year, and 5 percent for 2011 and 2012, respectively. In other words, the 747 scheme is impossible to achieve.

``Originally the government said that it would achieve an average of 7 percent in economic growth during the Lee Myung-bak administration. Later, it claimed that the 7 percent was a goal only in his final year and now it is completely scrapping the target,'' said a Seoul analyst who declined to be named.

``The vision of the $40,000 GDP per head and the seventh-largest economy will also be impossible to accomplish. Although the financial distress was an unexpected factor, Lee seems to have given up his pledge too easily.''

Should the projections of the MOSF be correct, economic growth will average less than 3 percent during Lee's five-year term, in comparison to 4.4 percent during the decade when Lee's two predecessors led the country.

In addition, market watchers point out that the administration cannot pin blame on just the financial swoon. Over the 10 years before Lee took the highest post, Korea outperformed global economic growth by 0.5 percentage points but last year's figure was 0.8 percent lower than the international average.

In this climate, some experts contend that the country might end up plunging to a ``3120'' status ― 3 percent growth, a per capita GDP between $10,000 and $20,000, and about the 20th largest economy in the world.

``Of course there is the financial crisis. But the thing is that President Lee has come up with many mistaken polices such as trying to control banks,'' said Kim Tae-dong, a professor of Sungkyunkwan University, as well as a chief economic adviser in Kim Dae-jung's administration.

``If such wrong-headed polices continue, 747 would become 3120 by the time Lee leaves office.''

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