Fellow Koreans, Speaker Kang Chang-hee and the members of the National Assembly, farmers, fishermen and small business owners as well as laborers working hard at workplaces, markets and industrial sites across the country,

I want to thank you all for your great efforts made throughout this year.

This past summer, the severest drought in 100 years and three consecutive mega-typhoons caused our farmers and fishermen great difficulties.

My warm sympathy goes to all those who sustained enormous damage right before the harvest season after having worked so hard. I am grateful to all the people who have striven to restore the damage.

The past five years have been a time spent tackling challenges head on in the midst of great upheavals.

In 2008 when my Administration set sail, we were faced with an unprecedented global financial crisis. Again in 2011 before the crisis had died down, a fiscal crisis emanating from Europe descended on us.

With the wind of freedom blowing through the Arab world to Asia, provocations by North Korea, which has been under pressure for a regime change, have been more intense than at any time before.

Tensions in Northeast Asia surrounding the Korean Peninsula have also been escalating along with power shifts in international politics and the global economy.

Every moment was truly filled with tension caused by a series of challenges and crises.

We have, however, taken off to new heights taking advantage of such crises as steppingstones.

Korea overcame the global crisis in the fastest and most exemplary fashion in the world.

It became the ninth country in the world to reach US$1 trillion in trade. It also became the seventh country to join the group of nations with a per capita income of over US$20,000 and a population of more than 50 million.

While many advanced nations suffered downgrades in their sovereign credit ratings, Korea saw its ratings upgraded by the three major international credit rating agencies one after another, which was unprecedented.

The credit rating agencies made a high evaluation of the Korean Government’s efforts to maintain fiscal soundness even in a difficult situation and bring crises involving inter-Korean relations under stable management.

Consequently, the problem of the so-called Korea discount, which has been caused by geographical risks on the Korean Peninsula, has been pretty much resolved.

Notably, the fact that Korea’s ratings rose higher than that of Japan, which is far more advanced in industrialization than Korea, was astounding news that no one could have expected.

The Republic of Korea has now proudly joined the ranks of advanced countries.

Korea is not only strong in the economy; it is rapidly emerging as a culture and sports powerhouse as well.

In 1948, the Korean Olympic team took 21 days to travel to London by train, ship and plane to attend the Olympic Games held there. This year, at the London Olympics, we stood tall as the fifth-ranked sports power in the world. The Korean Wave, starting with K-pop and dramas, is spreading out around the globe.

The Republic of Korea is moving from the periphery of the nternational arena toward center stage where it aims at becoming a powerful advocate of universal values.

In the global era, countries are vying to make more contributions to the world.

By hosting the G20 Seoul Summit, Korea spearheaded efforts to help surmount the global economic crisis. This year, it played host to the Nuclear Security Summit and contributed to hastening the day when we will achieve a world without nuclear weapons.

Our Armed Forces, which successfully carried out a rescue operation in the Gulf of Aden, are serving in many parts of the world in the interests of peace and common prosperity for all peoples.

Among the countries that newly gained independence after the end of the Second World War, Korea became the first nation to transform itself from an aid recipient to an aid donor. Last year, it hosted the 4th High Level Forum on Aid Effectiveness in the port city of Busan where aid supplies once came in.

The unique development experience and knowhow of Korea, which sharply rose to an advanced country from an underdeveloped nation, constitutes a valuable asset for making a creative contribution to the world. Its experience has already become a dream for developing countries.

The Seoul Development Consensus at the G20 Summit was designed to expand the sustainable viability of developing nations and help boost their economic growth going beyond simply providing aid. The Consensus received full support not only from the heads of state of the G20 member countries but also from developing nations.

Korea’s national standing throughout history has never been higher than now.

What makes us all the more proud is the fact that we pulled off such an achievement only with our own sweat and tears without doing any harm to others or taking anything away from someone else.

I am deeply grateful to all our people who have worked so hard to carve out the greater Republic of Korea of today. I extend heartfelt respect to you all. Now we all deserve to be proud of what we have accomplished.

Fellow citizens, the entire world is now going through great difficulties.

The 2008 financial crisis could be overcome thanks to preemptive, bold and unmistakable measures taken by the G20 countries working together.

Today’s fiscal crisis, however, is quite different from there.

It is difficult for countries to coordinate their policies because fiscal conditions vary from country to country, and there are many nations experiencing fiscal distress.

Unlike a financial crisis, a fiscal crisis can be likened to the collapse of the last seawall of a country’s economy. For this reason, it necessitates fundamental solutions, and recovery takes a long time.

As the crisis is prolonged, global exports and growth will slow down and production will also shrink.

Emerging economies, including China, India and Brazil, played the role of a locomotive for the economic turnaround during the 2008 crisis, but their growth is also losing steam. The Korean economy, which is highly dependent on trade, is no exception.

Korea’s economic fundamentals, however, grew more solid and robust in the wake of the 2008 crisis.

As of the end of last year, Korea’s sovereign debt to GDP ratio stood at 34 percent, one third of the average of the OECD member countries.

In terms of the external financing position, the country’s short-term foreign debt was drastically reduced and its foreign exchange reserves exceeded US$300 billion, the largest amount ever.

The Government has maintained fiscal soundness despite the crisis, and it is now working hard to help spur a more vibrant and qualitative economy.

In the second half of this year, the Government is taking measures to revitalize the economy by injecting more than 10 trillion won to prevent the real economy from contracting abruptly. At the same time, it is boldly implementing deregulation policies.

I believe that the low growth of the Korean economy will not last very long. I am certain that the Korean economy will soon turn around, boosting growth and expanding trade again.

The Government will take the current crisis as an opportunity to overhaul the country’s economic fundamentals so that it will be fully prepared for yet another growth surge when the global economy recovers.

Distinguished members of the National Assembly,

When this crisis ends, the landscape of the global economy will have greatly changed.

As the axis of the world’s economy is fast shifting toward Asia, the Korean economy and businesses are expected to receive a great chance to make yet another leap forward.

Only those who make thorough preparations can take advantage of an opportunity.

More than anything else, the Government will lay the firm groundwork for national competitiveness to brace for the future.

Science and technology, particularly the promotion of basic science, is the cornerstone of national competitiveness.

We have thus far emulated advanced technologies of other countries and traced their footsteps. For the country to take off as a leading advanced nation, however, it should write new chapters in the history of creativity and initiative anchored in basic science and original technologies.

Despite global economic crises, the Government has increased the R&D budget by a large margin with a view to catapulting Korea into the group of seven science and technology powerhouses.

As a result, Korea ranked 6th in the world in total national R&D spending and 2nd in the percentage of R&D expenditures in the GDP.

This year, the International Institute for Management Development in Switzerland ranked Korea’s international competitiveness in science and technology in the 5th and 14th place, respectively.

The country’s R&D budget for this year increased more than 1.5 times from four years ago. The accumulated R&D investment over the past five years reached 68 trillion won, and more than half the amount was funneled into research for basic science and original technologies.

The Government will also inject 5.2 trillion won into the International Science and Business Belt project by 2017. The Belt will serve as a new model for the nation’s advancement because it will be instrumental in creating new knowledge and technologies by attracting the best brains in the sciences from around the world and linking them with business opportunities.

The development of science and technology will, after all, have to be supported by creative minds.

Creativity will become the biggest growth engine and provide the competitive edge in the future smart society.

What helped shape the Republic of Korea of today was educational enthusiasm that made people keep studying even in the face of abject poverty.

We, however, now have to go beyond the quantitative education. That has been promoted thus far.

The Government has heavily revised regulations and systems to help universities sharpen their competitive edge by giving them more autonomy and letting them concentrate on their core areas of competence.

The Government also drastically streamlined visa-related regulations so that foreign students can more freely come to Korea to study. As a result, approximately 90,000 international students came to Korea last year.

The college admission officer system was introduced so that universities can recruit a variety of creative and talented students by evaluating applicants’ talents and aptitudes.

Distinguished members of the National Assembly,

The global economy is going beyond the era of tangible assets and is entering an era of intangible assets when intellectual property will be valued more.

Korea should develop a knowledge-based economy that can create quality jobs and generate high value-added industries, including the patent industry, content industry and design industry.

Last November, the Government formulated the first national intellectual property basic plan, a comprehensive strategy concerning intellectual property. Since then, it has mustered all its capabilities to establish a competitive intellectual property ecosystem.

Businesses should also double their efforts to create intellectual property by proactively meeting paradigm shifts in the market and recognizing intellectual property as a crucial factor in business operation.

Fierce patent wars are already going on in the global market. Notably, checks against those countries like Korea emerging as an advanced nation are all the more intense.

The Government will provide active support so that Korean businesses will be able to secure a competitive edge in intellectual property wars and continue to grow.

The Government has placed emphasis on its green growth projects with an aim of coping with climate change and generating future growth engines at the same time, thereby enabling sustainable growth.

The Government has so far invested about two percent of the GDP each year to foster green industries and develop green technologies.

Over the past four years, green R&D has more than doubled resulting in a breakthrough in green technology. Technological levels for solar cell modules and rechargeable batteries have already reached more than 80 percent of those of advanced countries.

The Government has also put in place a legal and institutional framework for reducing greenhouse gas emissions and moving toward a less consumptive society. Last May, bipartisan cooperation in the National Assembly made it possible to pass a greenhouse gas emission quota trading act.

The Global Green Growth Institute, the first international organization established at Korea’s initiative, is about to be officially launched.

Green growth was first proposed just four years ago, and it is now being discussed globally as a strong way to balance the environment and development.

The Government will develop green growth into an international asset going beyond the boundaries of Korea. By doing so, it will make contributions to humanity and continue to enhance the national standing as well.

The Four Major Rivers Restoration Project, which has been implemented as part of green growth policy to deal with climate change, is now in its final phase.

In the process of carrying out the project, there have been a lot of controversies and pros and cons, but its effect has already manifested itself in the wake of a series of huge typhoons such as we used to experience once in a 100 years.

A total of 1,800 km of bike paths crisscrossing the country along the rivers is breathing new life into the rural areas and their cultural and historic sites that have thus far been largely ignored.

Many cyclists riding on the bike paths have marveled at the beauty of the country’s clear, picturesque rivers and mountains. They are now also able to enjoy diverse regional customs and food as well as distinct atmospheres.

In addition, they are greatly impressed by the depth and richness of our history and traditions while touring around historic sites in the vicinity of the rivers.

In the not-too-distant future, I believe the four major rivers and bike paths along them will become a representative icon for Korean nature, culture and history and emerge as tourist attractions for international visitors as well as Koreans.

The United Nations Environment Programme gave high marks to the Four Major Rivers Restoration Project by reporting, “the attempt of ecological restoration of the four main rivers and their tributaries is commendable.” It also said the Project would contribute to addressing water-related problems and revitalizing local economies.

An OECD report released this year also evaluated the Project as a leading example of water resources management and green growth. The report also projected that Korea would rise to a leading nation in water management.

Some countries, including Thailand, are now trying to benchmark the Four Major Rivers Restoration Project.

The Government will do everything it can to wrap up and maintain the Project in an impeccable manner. At the same time, it will make sure to reengineer the tributaries of the four major rivers without any problem.

Distinguished members of the National Assembly,

Korea’s service industry accounts for approximately 70 percent of overall employment and 60 percent of the country’s GDP.

Its productivity, however, stands at only half the level of the United States and about a meager 40 percent of that of the domestic manufacturing industry.

From the time of its inauguration, my Administration has put every possible effort into advancing the service industry.

The principles of the Government for the development of service markets are creating descent jobs, upgrading efficiency and respecting market principles.

As for tourism, more than 10 million foreign tourists are expected to visit Korea this year for the first time.

The Government has laid the foundation for attracting more overseas patients by making use of Korea’s highly-sophisticated medical technology.

There are many sectors that have produced tangible results, but overall the service industry is only making slow headway.

It is necessary to foster the industry as Korea’s new growth engine by sharpening its competitive edge significantly. To this end, the framework act on service industry development should be legislated as soon as possible so that the act can work as an institutional apparatus providing systematic support.

I look forward to unreserved cooperation from all the distinguished members of the National Assembly.

Fellow Koreans, distinguished members of the National Assembly,

In the aftermath of the global economic crisis, the divide between classes is widening and young people lack job opportunities. All countries of the world are concerned about these problems, and Korea is no exception.

The vision of eco-systemic Development to create a compassionate society where all people are better off will be the solution to this problem.

A society that can ensure broad-based growth is a society that can give hope to low-income and middle-class households more than anything else. Jobs will be the source of hope, and the best welfare policy of all.

The Government has always placed job creation as the top priority in steering state affairs and has worked hard toward that goal.

Fortunately, more than 400,000 jobs have been added this year compared to last year. The jobless rate has also stayed within the low three-percent level, helping stabilize the employment market.

During the past four years, the number of newly employed increased by more than 810 thousand, putting Korea in seventh place in terms of job growth among the OECD member nations.

The percentage of permanently employed wage workers with high job security has steadily increased as well.

The Government has established Meister high schools and bolstered its support for specialized high schools. These efforts by the Government are aimed at ushering in a new era for high school graduates.

Through such moves, the Government has tried to help cut back on the social costs incurred by the inflation in higher education and give opportunities for “learning while working” to young people who come from less-fortunate families.

The Government and state-invested corporations have hired more high school graduates. Financial institutions and large businesses have also actively shown willing responses, heralding a meaningful change in our society.

The Meister high schools will produce their first graduates in February next year, and most of the graduating students have already landed jobs with prominent companies.

An advanced nation is a society where people with the best skills and techniques in any specific sector can be respected regardless of their academic backgrounds.

The Government will continue to make further efforts to help reduce the harmful consequences of the overemphasis on academic achievement by creating an open society in employment that values the individual’s capabilities more than their academic backgrounds.

Every country wants to provide for a decent standard of living for its people.

When the economy undergoes difficulties, low-income families become more vulnerable than others, and the need arises for the nation to make the safety net stronger.

That is why the Government has increased the welfare budget the most in history despite fiscal hardships.

The Government tried to formulate a tailor-made welfare system under which those most in need would get assistance when they need it.

Some 57,000 people who have been in the blind spots of the social welfare system have been newly identified, gaining access to Government benefits. The Administration has arranged jobs for many of them, allowing them a new opportunity to stand on their own feet.

To offer tailored welfare benefits for individuals, the Government is carrying out a program to hire as many as 7,000 new government workers who will help provide benefits in person.

In additional to that, cities, counties and metropolitan districts have launched “welfare support task forces for hope” so that they can provide low-income families with combined services involving public health, welfare payments, employment and other necessary benefits.

Beginning this year, the Government is paying insurance premiums for low-income laborers at small companies as part of a plan to eliminate blind spots in the social insurance programs.

Through an integrated social welfare management network, the Government is reducing waste and losses of the welfare budget, giving more benefits to the people who need them the most.

The integrated management will soon encompass all the welfare information sub-systems currently scattered in different ministries and agencies. In this way, the welfare delivery system will become more efficient.

One important guiding principle of the Government’s welfare policies is to provide “wellbeing through work.” The Administration has been expanding such microcredit loan programs as the Miso Financing, Haetsal loans and Saehuimang Holssi loans to help those who once fell but are willing to get back on their feet.

For the sake of raising the nation’s birthrate, one of the lowest in the world, and expanding women’s participation in the workforce, the Government has shown keen interest in the issue believing that childrearing is the Government’s major responsibility as well.

The Administration introduced a universal curriculum for five-year olds this year and will expand the program to care for three and four-year olds next year.

The Government will consistently enhance relevant systems so that parents will choose between childcare at home or at facilities according to the age of their children and the needs of their family.

Distinguished members of the National Assembly,

I am afraid violent crimes in our society have reached a serious level.

Most of the victims are women, children and other innocent citizens, making the problem particularly worrisome.

In recognition that school violence is a serious problem, the Government established a set of comprehensive measures with the participation of schools, households and the community.

Fortunately, an active movement has started centering on the schools in a bid to root out violence. As the judicial and law enforcement authorities join the effort proactively, positive changes are taking place.

However, a complete eradication of school violence cannot be accomplished in a short time.

Teachers, students, parents and the community all have to sharpen their awareness of the issue and change their behavior accordingly.

The recent series of violent crimes, including sexual violence, especially against children, has caused a great shock to everyone.

In order to guard against potential offenders and strengthen law-enforcement capabilities, the Government will mobilize all available police force and government power.

The Government will also chase to the end the chronic, illegal loan sharks who make poor people miserable and infringe on their human rights.

Since April, the law-enforcement authorities have been encouraging active reporting on loan sharks in an effort to crack down on them and relieve the pain of the victims.

In the movement to build a healthy and safe society free from crime, everyone in the nation should join forces as one.

My fellow Koreans,

In this age of shifting global power, the Korean Peninsula as well as all of Northeast Asia is facing a grave situation in terms of international relations and the security environment.

We have to be aware that the choices we make today will determine not only things of the present time but also events to come in the future. This is why we have to make every decision carefully and thoughtfully.

Pursuing the coexistence and co-prosperity of South and North Korea, the Government has consistently maintained flexible yet principled North Korea policies.

Pyongyang’s development of nuclear weapons and missiles menaces the security of the Korean Peninsula as well as the world; therefore it cannot be tolerated by the international community.

No country in the world today threatens North Korea.

We do not have any intention to shake Pyongyang’s system or to unify the peninsula through absorption.

The real threat to North Korea lies within not without.

The wind of freedom is sweeping the globe, and all the nations compete with one another to make their peoples flourish.

We earnestly hope that Pyongyang, too, will open its doors to the world without delay and join in the mega trend of history. By doing so, it will be able to raise the quality of life of its people and enhance their human rights.

When the North does that, the South as well as the entire world will help it.

Unification of Korea should not be left as a thing for the distant future. Peaceful unification is the cherished wishes of the 80 million Koreans and the defining task of our times.

In order to bring about a celebrated unification early, we have to prepare for it faithfully and continuously starting now.

When facing the historic task of national unification, there cannot be division between the ruling and opposition parties. When the National Assembly and the whole nation march together, the day of unification will be advanced.

Distinguished members of the National Assembly,

Solid national security is the foundation for the country’s survival and prosperity.

With extraordinary determination in recent years, the Korean Armed Forces have been transformed into battle ready crack forces and are now fully ready to deter any provocations by the enemy.

That notwithstanding, now is the time to build even more advanced and mighty forces that can deal with all future-type wars. We are at a point where we need to expedite defense reforms so that our armed forces will turn into a fundamentally new body.

Defense reforms cannot be delayed especially because the wartime operational control is to be returned to Korea in 2015, after which our armed forces must lead the operations efficiently on their own.

The Government is doing all it can to improve the welfare of military personnel in an effort to boost morale and self-esteem, encouraging them to carry out their assigned duties faithfully.

The Government will establish an atmosphere in which soldiers will feel proud of being in uniform. The State will also do its utmost to pay tribute to those who sacrifice their lives in defense of the homeland.

The honorable Speaker Kang Chang-hee, distinguished members of the National Assembly,

Through this regular session, the 19th National Assembly will examine for the first time Government-proposed bills concerning, among other things, rejuvenation of the economy as well as stabilization of people’s everyday lives.

The Government put all its effort into preparing the budget plan so that the next Administration will run more smoothly and give hope to future generations in particular.

Considering the hard lives of low-income families and the need to get prepared for the future, I ask for your prompt action on the proposed bills.

A number of bills have been submitted including the Defense Reform Act and the Act on the Inter-Korean Cooperation Fund that are essential to strengthen national security and preparation for the nation’s future. Other bills have to do with rooting out serious crimes including sexual violence.

I urge you to take up discussion and act on them expeditiously, and I earnestly hope that the 19th National Assembly will be recorded as one that laid a firm cornerstone for the nation’s economy and the future.

Finally, I would like to explain the 2013 national budget plan and the direction of fiscal operations.

The focus of the 2013 budget plan has been placed on boosting economic vitality and stabilizing the people's daily lives, which in turn will further enhance Korea's international creditworthiness and help prepare for the implementation of various future policies.

As for next year's fiscal balance as a percentage of the GDP, total outlays will be maximized while maintaining a balanced budget considering the difficult economic situation.

The increase rate for total 2013 expenditures will be 5.3 percent.

For the financial loan program amounting to 6.7 trillion won, abundant private sector money will be utilized, signaling a departure from the past practices of using Government funds directly.

The change in the method of fiscal operation is not expected to worsen the fiscal balance, but instead in effect to expand the actual rate of total outlays to 7.3 percent from 5.3 percent.

Major emphasis will be given to managing Government debts as well.

The following are four major points of the 2013 Government budget plan.

First, under the proposed budget, the Government will strive to overcome the current economic hardships and help make a turnaround. The proposal can be called a dynamic budget.

Under the plan, the Government will encourage Korean and foreign companies to make investments and stimulate domestic consumption. To bolster the nation’s trade, the Government will provide more trade financing and take special measures for small and medium-sized companies to improve their export capabilities. As a means of rejuvenating provincial economies, the Government will support local infrastructure projects and help improve the fiscal capacity of local governments.

Second, the Government will try to enhance the wellbeing of low-income families by increasing job opportunities and welfare benefits. Protection from violent crimes and natural disasters will be stepped up in an effort to bring about a safe community. The proposal can be called a compassionate budget.

The Government will provide support for raising incomes and improving welfare through work by creating more jobs and strengthening job security.

According to the recipients’ life stages and other individual features, carefully designed welfare benefits will be offered. Citizens in need of assistance will be assured of receiving it.

The proposal increases funds required for eliminating sexual and school violence as well as for the prevention of various disasters, food contamination and traffic accidents.

Third, in the coming year, the Government will actively develop economic growth engines for the future and enhance the fundamentals of the national economy. In this sense, the fiscal proposal can be called a empowering budget.

The Government will increase investments in creative, pioneering R&D projects and the service industry as well as concentrate on nurturing global talent. By doing so, a firm basis for sustainable development will be put in place.

In addition, it will work to help turn the metal processing and other traditional parts and component industries into high-value-added industries. It will also provide support to improve the competitiveness of economically vulnerable microbusiness owners, farmers and fishermen and the security of ordinary households.

The fourth and final characteristics of the proposal can be described as a lean budget because it has trimmed the fat.

The Government will utilize private financial institutions for some government loan programs by compensating them for the difference between market interest rates and the government interest rate. It will also aggressively restructure annual expenditures.

The proposal also indicates the Government’s determination to streamline similar and duplicated projects and thoroughly manage the results of fiscal operations.

The Administration is fully ready to cooperate with the National Assembly so it can work efficiently from the deliberation stage until final actions on the pending bills.

Once again, I plead for your active cooperation in passing the Government proposals within the legal deadline. In this way, the Administration will have time to make necessary preparations by the end of the year and carry out the fiscal plan as soon as the New Year begins.

My fellow citizens,

The Honorable Speaker Kang Chang-hee and distinguished members of the National Assembly,

As President of the Republic, I have been immensely proud of working with the Korean people for the past five years.

Today, I vividly feel the powerful energy emanating from the great leaps the Republic of Korea is taking toward the international stage.

Using the energy as a driving force, now is the time for the country to build up a leading, advanced country in name and substance.

Responding to the environmental crisis with low-carbon, green growth, the country needs to find new growth engines.

By practicing middle-of-the-road pragmatism, we need to avoid extremism and futile ideological confrontation, and instead construct a united Republic of Korea.

We have to establish a fair society in which everyone has an equal opportunity while big and small businesses share growth hand-in-hand.

When the spirit of eco-systemic development seals the gap of polarization, we will be able to put in place a forest garden of coexistence where every individual lives a happy life.

This is what my Administration has tried to accomplish for the past five years.

This is the path the Republic has to walk in the years to come, and I like to call the path the Korean Route.

In a couple of months, the nation will hold the 18th presidential election. My Administration will do its best to manage a clean, fair election.

In the process of building a leading advanced nation, I have tried to share agonies and work together with the members of the National Assembly. And I will fondly cherish those valuable times.

As the working administration, my Administration will do its utmost to care for the everyday lives of all citizens until my final day in office. And I will continue to lay a firm cornerstone so that the next Administration will be launched smoothly.

Thank you very much.

*Government press release (October 5)