S.Korea's Roh reaches out to Western investors

S.Korea's Roh reaches out to Western investors

Paul Eckert, Reuters, Seoul

South Korean President-elect Roh Moo-hyun, once a fiery union lawyer, reached out to foreign investors on Friday, vowing further steps to open a fast-growing economy that has a history of hostility towards outsiders.

Roh also said, in a speech to the American and European chambers of commerce in Seoul, he was confident the North Korean nuclear crisis would be resolved peacefully.

The 56-year-old former dissident lawyer's breakfast with hundreds of Western executives was the latest step in his shift to the pragmatic center, after election campaign rhetoric about less reliance on the United States that rattled both Washington and the South Korean establishment.

"It is my belief that companies that operate here with foreign capital investment are not foreign companies but Korean companies, in that they provide jobs, create economic value and pay Korean taxes," Roh said.

U.S. and EU investors accounted for 60 percent of foreign investment in the country, he said.

"You and the Korean people today are in the same boat named 'Korea' and are sailing to a common destiny. I will try to be a good captain of the ship," joked the one-time maritime minister.

With war jitters and the government moving to rein in galloping consumer debt, analysts say prospects for the South Korean economy are uncertain. The government sees economic growth of around five percent in 2003 versus around six last year.

The corporate charm offensive followed a visit by Roh on Wednesday to the main U.S. Army base in Seoul, where he saluted troops in an effort to dispel fears that his election last month was a vote to expel American soldiers deployed to protect a country still technically at war with the communist North.

Anti-American protests surged last month after a grisly road crash in which two girls were crushed by a U.S. Army vehicle.

Roh, who takes office on Feb. 25, "comes into office with less international experience than the president of any major country I can think of", said a U.S. diplomat in Seoul.

The self-educated lawyer, who once boasted he'd never been to the United States, said he would visit Washington as soon as possible after taking office.

Roh told the executives he was aware of their complaints about problems with Korean corporate governance, regulatory transparency and labor market flexibility. He said his years as a strike lawyer would help him reduce labor strife.

"I don't think of myself as a fighter. I'm more of a mediator," he said of his firebrand image from the 1980s when he tackled corporations and Seoul's then military rulers in court.

Roh said xenophobia toward foreign business, for which South Korean workers are infamous, was mostly a thing of the past.

"The mindset of Korean labor has changed," he said. "Workers used to see foreign companies as extorting money from Korean labor; now they see the firms as creating jobs."

Roh was tentative about the timing of plans to privatize state-held banks and energy firms.

"We will privatize the corporations when the market is able to absorb that change," he said in response to a question.

One U.S. executive grumbled that South Korean labor policies are far more cumbersome than Roh described.

"South Korean workers, the government and the media react allergically to foreign attempts to buy, say, local banks," said the executive, who declined to be identified.

But Jeffrey Jones, a past-president of the American Chamber of Commerce in Seoul, said Roh's vision was good for investors.

"During the election process, he said things that were troubling to the conservative community as well as to the foreign community. But I think we see today that electioneering and the reality of being the president of an important country are two different things," Jones told Reuters.