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(LEAD) Ruling party chief defends income-driven growth as fundamental policy shift

All Headlines 16:15 September 04, 2018

(ATTN: ADDS reaction from opposition parties in last 5 paras)

SEOUL, Sept. 4 (Yonhap) -- The chief of the ruling Democratic Party (DP) vowed Tuesday to support the government's inclusive economic policies to pave the way for the goal of US$40,000 gross national income (GNI) per capita.

Lee Hae-chan, who was recently elected as the DP's chairman, delivered a speech at the National Assembly, which began a 100-day regular session Monday.

"President Moon's inclusive growth model -- the income-driven growth, the innovative growth and the fair economy -- will become a new paradigm for South Korea's economy and will help open an era of a $40,000 GNI per capita," Lee said.

Lee focused his speech on economic issues amid growing controversy over the Moon Jae-in government's signature income-led growth policy. Public support rates for Moon and the DP have been on the fall as critics say the labor-friendly policy hurts investment and job growth.

Lee stressed that though South Korea is on the threshold of joining advanced countries, it could fall into a trap of low growth if innovation does not back it up.

South Korea's GNI per capita reached $29,745 in 2017, up 7.5 percent from a year earlier, according to the Bank of Korea.

"In the $30,000 (GNI per capita) era, it is not easy to achieve steep growth as seen in the past. Income inequality could worsen and the economy could undergo a crisis and fall into a long slump if there is no innovation," the DP chairman said.

"For sustainable growth, we need to craft the tailored, creative models to boost public welfare and improve labor (market conditions), as well as to achieve innovation growth," he noted.

It marked Lee's first speech as a party leader since September 2012, when he led the then main opposition Democratic United Party.

Lee Hae-chan, the chief of the ruling Democratic Party (DP), delivers a speech at the National Assembly on Sept. 4, 2018. (Yonhap)

Touching on North Korea, Lee said that the DP will spearhead efforts to normalize the now-shuttered joint industrial park in North Korea's border city of Kaesong.

In February 2016, the then conservative government closed Kaesong Industrial Complex, the symbol of inter-Korean reconciliation, in response to North Korea's nuclear and missile tests.

The resuming of the complex, however, would not be easy amid international sanctions unless there is tangible progress for North Korea's denuclearization.

The DP chief stressed the need to fully implement the April inter-Korean summit agreement to pave the way for the North's denuclearization and inter-Korean economic exchanges.

"To this end, parliamentary ratification of the April inter-Korean summit deal is necessary," he said.

Opposition parties dismissed Lee's speech as a repetition of the government's mantra of the income-driven growth policy.

"(The speech) turned a blind eye to people's livelihood and only contained policy goals set by the Moon Jae-in government," the main opposition Liberty Korea Party said.

"Amid impasses over North Korea's (nuclear) issue, (the DP) should not bring up the normalization of the industrial complex or the resumption of a joint tour program at Mount Kumgang," it added.

The minor opposition Bareunmirae Party denounced the ruling party for presenting a "too rosy" vision with the goal of $40,000 GNI per capita.

"The $40,000 era is just a vain hope for people who are desperate for jobs," the third-largest party said.


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