The New Nation - Internet Edition

AFP, Seoul

The eyes of the world are on nuclear- armed North Korea, but south of the border there's only one issue that really matters in Wednesday's presidential election: the state of the economy.

South Korea's expected growth this year, close to five percent, would be the envy of Japan, the United States and much of Europe. But candidates are fielding plenty of grumbles along the election trail.

"Business is not good. Please revive the economy," a woman vendor at Seoul's Dongdaemun clothes market told front-runner Lee Myung-Bak this month.

"I will make it better," he promised, holding her hand tenderly.

Analysts say Lee, 65, candidate of the conservative opposition Grand National Party and with a business background, is riding a wave of discontent over slowing growth under a decade of liberal rule and is hotly tipped to win the poll.

"The prime concern of voters is the economy," Huh Chan-Guk of the Korean Economic Research Institute told AFP.

South Korea recovered strongly from the 1997 economic crisis, which forced massive corporate restructuring and left millions jobless.

But over the past decade the growth rate has still fallen to an annual average of 4.4 percent, down from the pre-crisis average of eight percent. Youth unemployment is over seven percent.

"Young people who supported the liberal government in previous elections feel frustrated. They are now more interested in growth and practical issues as they find it harder to get jobs," Huh said.

Companies have remained reluctant to invest, citing excessive regulations and an uncertain business outlook, he added.

"Many people are displeased with slower growth than before. This is a relative concept," said Sungkyunkwan University political science professor Ma In-Seok.

Income gaps have widened and the job market has not improved despite brisk exports and reviving domestic consumption, Ma noted.

Nearly eight out of 10 Koreans think wealth is shared unfairly, according to a recent government survey of 33,000 households.

And the number of household heads who are jobless and rely on income from other family members has increased to a four-year high of 2.56 million, or 15.6 percent of the total.

"The global economy has maintained a favourable tone since Roh (President Roh Moo-Hyun) took office (in February 2003). But the liberal government failed to provide incentives for companies to seize this opportunity," Ma said.

Analysts say voters believe Lee, a former construction executive and ex- mayor of Seoul, has the "can do" business background to revive the economy.

"Economy first!" is his main slogan.

"Many people expect him to create more jobs, although he is not seen as the best choice (in other respects)," said Ma, referring to allegations of past real estate speculation and tax evasion, which Lee has always denied.

He was also accused of major fraud allegedly engineered by his former business partner, although prosecutors earlier this month said Lee had no case to answer.

"The economy had never been a decisive factor in previous elections but the situation is now different," Ma added.

Lee has made a 747 pledge-achieving seven percent annual growth, increasing per capita income to 40,000 dollars and making South Korea the world's seventh largest economy by encouraging free-market forces.

Chung Dong-Young, of the pro-government United New Democratic Party, places second in most opinion polls but well behind Lee. He campaigns against what he calls Lee's "jungle capitalism, under which only the strong survive."

Chung vows to create "happy families" by creating more jobs, improving education, stabilising apartment prices and generally supporting the underprivileged.

Right-wing independent Lee Hoi-Chang, in third place, favours a drastic tax cut for small and medium-size firms.

"There are no big differences between the economic pledges of liberal and conservative candidates. Lee's (Myung-Bak) pledge has no meat but enjoys greater support because voters expect him to focus on growth," Ma said.