By Kang Hyun-kyung
Staff Reporter
Grand National Party (GNP) presidential nominee Lee Myung-bak said Thursday that spending was not the answer to deepening social polarization.
At a forum for business leaders and economists in Seoul, Lee stressed that tailored welfare services such as welfare-to-work packages could be a solution to the widening income gap between wealthy and poor families.
He unveiled his social policy vision after his rival Chung Dong-young of the United New Democratic Party (UNDP) called Lee an advocate of a brutal market economy.
``The trickle-down effect of growth will flow to middle- and lower-income groups under my plan so that these people will be better off. They are not going to fall prey to social polarization,'' Lee said.
During his term as mayor of Seoul, the Seoul Metropolitan City government adopted an alternative welfare policy for homeless people _ a two-phased program of job placement after vocational training.
``I learnt a lesson that the government should set clear goals such as policy targets and priorities and then provide tailored services to meet them,'' Lee said.
``Spending on all entire low-income families is unlikely to be effective. Instead, policymakers should focus on specific target groups and policies,'' he said.
Lee said that economic prosperity and an overall improvement in the standard of people's living can both be achieved if three conditions are met.
``Finding an alternative engine for growth, creating jobs through stimulating investment and putting a working welfare system in place are the three core elements for balanced growth,'' Lee said.
Lee, a former business executive, said it is time for the government to rethink whether regulations preventing businesses from owning banks are still needed for the economy.
``I feel that regulations should be eased so that private enterprises are allowed to buy banks,'' Lee said. ``The government can prevent any possible negative effects by running a strict supervisory system.''
He said `` fit-and-proper tests'' could be conducted to make sure the system functions adequately.
The standard-bearer of the business-friendly GNP also underscored the role of the banking industry, saying that banks should seek alternative ways to avoid risks entailed in investment.
``The role of the government is important as well. The government can work closely together with the private banking sector to stimulate the market.''
Lee said his government would not intervene in the private sector, but instead, would help promote investment by private enterprises with support through policy measures.
He added that ``on-lending practices,'' widely adopted in the European Union, are a good example for the government to follow.