South Korea’s new president Lee says country faces ‘tangled web’ of crises

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South Korea’s new leftwing president Lee Jae-myung said his country faced a “tangled web of overlapping crises” as he was sworn into office on Wednesday after an emphatic election win.

In an inaugural address in Seoul, Lee vowed to overhaul what he said was an outdated model of development in Asia’s fourth-largest economy, which he blamed for fuelling inequality and hindering growth.

Lee won a snap election on Tuesday, ending a political crisis sparked by then-president Yoon Suk Yeol’s brief declaration of martial law in December. South Korea’s equity markets rose on Wednesday to their highest level in 10 months.

The 61-year-old promised to “build a new nation of hope” but acknowledged South Korea faced a “tangled web of overlapping crises across diplomacy, national security, and democracy”.

The economy is under pressure from US President Donald Trump’s aggressive trade policies and intensifying competition from Chinese exporters.

Lee will be expected to negotiate a tariff deal with the US president while he pursues “pragmatic diplomacy” with Beijing at a time of intensifying US-China rivalry.

In his address Lee also promised to respond to “nuclear and military provocations” by North Korea, the country’s heavily armed neighbour.

“We will keep communication channels open with the North and build peace on the Korean peninsula through dialogue and co-operation,” Lee said. “It is better to win without fighting than to win through conflict, and the most reliable security is peace that makes fighting unnecessary.”

The Bank of Korea last week slashed its growth forecast for this year from 1.5 per cent to 0.8 per cent, after the economy contracted slightly in the first quarter amid a sharp slowdown in exports.

Lee’s win puts both the presidency and the national assembly in the hands of leftwing parties after several years of divided government.

South Korea’s benchmark Kospi share index rose by more than 2.4 per cent in morning trading. Investors anticipate that Lee will bring in governance reforms to strengthen the hand of minority shareholders, loosening the grip of the families that control the country’s biggest industrial groups.