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Presidential rivals sell economic policy visions around AI, deregulation and reshoring

Published: 13 May. 2025, 10:23 Updated: 13 May. 2025, 13:38

This composite photo shows, from left, Lee Jae-myung, presidential candidate of the Democratic Party, People Power Party presidential candidate Kim Moon-soo and Lee Jun-seok, presidential candidate of the minor Reform Party. [YONHAP]

Promising to transform Korea into a top AI superpower, abolish regulatory hurdles and lure back overseas factories, key presidential hopefuls have made ambitious economic pledges the centerpiece of their campaigns, with the official election period having kicked off this week.

The two leading contenders, Lee Jae-myung of the Democratic Party (DP) and Kim Moon-soo of the People Power Party (PPP), alongside Lee Jun-seok of the minor Reform Party, have unveiled their top 10 campaign pledges, all with a heavy focus on rebooting the sluggish economy.

In a policy overlap, both Lee and Kim vowed to help turn Korea into one of the world's top three AI powers, with Lee promising to promote private investment of 100 trillion won ($70.4 billion) and Kim pledging to create a joint public-private AI fund in the same amount.

Lee says he will, if elected, work to significantly expand AI-related government budgets and secure more than 50,000 high-performance graphics processing units (GPUs), positioning the sector as a key engine to drive the country's economic recovery.

Kim promises to nurture up to 200,000 AI talents and expand enrollment in AI graduate schools and software-focused universities.

Outside of AI, Lee unveiled plans to cultivate defense industries as a national flagship sector, including the creation of a control tower for defense exports, expanded investment in defense-related AI and new tax incentives for defense export companies.

Lee Jae-myung, presidential candidate of the Democratic Party, poses for photos during a campaign rally at a venue in Daejeon on May 12. [JOONGANG ILBO]

Lee is also betting on soft power and bold fiscal stimulus to drive the economic recovery. He has pledged sweeping state support for K-content industries and domestic over-the-top (OTT) platforms, setting a target of 50 trillion won in annual cultural exports.

Kim promises to overhaul corporate regulations and taxes that hinder private investment, and vows to legislate a basic act on economic innovation to eliminate red tape in emerging industries and technologies.

The former labor minister also promises to lower corporate and inheritance tax rates while reforming the country's rigid 52-hour workweek system by introducing greater flexibility based on labor-management agreements.

The NRP's Lee Jun-seok is also betting on corporate regulatory reform, pledging to help companies deal with less regulation.

People Power Party presidential candidate Kim Moon-soo poses for photos during a campaign rally at a venue in Daegu on May 12. [NEWS1]

He has also promised to spearhead an initiative to bring back Korean manufacturers that have moved their production overseas, promising incentives and support to revive domestic industrial regions.

In addition, Lee proposed introducing a special pension system for outstanding researchers and engineers as part of his science and technology talent strategy.

He says he will offer diplomatic-level fast-track immigration clearance privileges at airports and ports to such top-tier talent in science, aiming to enhance their status and attract global talent to Korea.

Recent economic data underscores economic challenges for the next president.

Lee Jun-seok, presidential candidate of the minor New Reform Party, speaks during a campaign rally at a venue in Jung District, central Seoul, on May 12. [NEWS1]

According to the Organisation for Economic Cooperation and Development (OECD), Korea's potential GDP growth is projected to fall to 1.98 percent in 2026 from 2.02 percent this year.

The country's five major business lobbies, including the Korea Chamber of Commerce and Industry (KCCI) and the Federation of Korean Industries (FKI), recently released an unprecedented 269-page joint policy recommendation for the incoming government.

In it, they warned that Korea's economy is losing vitality amid entrenched low growth, aging demographics and global trade protectionism.

"Given the current decline in our economy's growth momentum, it is necessary to boldly explore and attempt new growth strategies that have not been tried before," a KCCI official said.

Yonhap