Ex-CEO takes over as South Korean president

By Jonathan Thatcher

SEOUL (Reuters) - Ex-construction boss Lee Myung-bak was sworn in as South Korea's new president on Monday, promising business-like pragmatism after a decade of ideological policies he said had left the world's 13th largest economy adrift.

His inauguration speech stuck closely to the campaign pledges for radical change that helped him to a landslide election win in December, ending 10 years of liberal rule his supporters say kept the South Korean economy from reaching its real potential.

"Although it is going to be difficult and painful, we must change much more and much faster," the 66-year-old conservative told an estimated audience of 60,000 people that included Japanese Prime Minister Yasuo Fukuda and Secretary of State Condoleezza Rice.

"Economic revival is our most urgent task," he said. "At times over the last 10 years, we found ourselves faltering and confused ... we must move from the age of ideology and into the age of pragmatism."

Analysts say he will have a tough time reaching his target of an average 7 percent annual growth over the next decade and will certainly miss it in his first year, as a global economic slowdown cuts into South Korea's export-dependent economy.

Lee, who also promises to double per-capita income to $40,000 a year, is limited by the constitution to a single 5-year term to push through his ambitious plans.

Though the average growth rate of more than 4 percent under the outgoing government is one many countries might envy, South Korean voters had come to expect much higher figures.

"The potential growth rate of the Korean economy is estimated to be closer to 4-5 percent. One of the risks of the incoming president's 7 percent growth target is public dissatisfaction if the target is missed," said James McCormack, head of Asia-Pacific sovereign ratings at Fitch Ratings.

Lee, nicknamed the "Bulldozer" from his construction days and whose move into politics included a popular stint as Seoul's mayor, said the country was at a crossroads and urged South Koreans to accept change.

He pledged to cut away bureaucracy to make life easier for businesses that have kept billions of dollars of cash rather than invest the money in what they saw as the stifling economic environment fostered by the outgoing government.

In a nod to foreign investors, who have long complained of discrimination in South Korea, he said he would be more open to the outside world.

FOREIGN RELATIONS

Lee made clear he wanted closer relations with the United States, which maintains close to 30,000 troops in the South but with whom relations in recent years have at times been prickly.

Rice said Lee's inauguration was an opportunity to celebrate the peaceful transition to democracy of South Korea.

"It was a really wonderful and moving ceremony this morning -- a beautiful speech by the president," she told reporters.