Former businessman Lee Myung-Bak took office as South Korea's president Monday, promising economic revival for his nation and a better life for impoverished North Korea if it scraps its nuclear drive.

"We must move from the age of ideology into the age of pragmatism," the conservative leader announced as he was inaugurated for a single five-year term following a decade of left-leaning rule.

The colourful open-air ceremony in near-freezing weather was attended by some 50,000 guests, including US Secretary of State Condoleezza Rice and Japanese Prime Minister Yasuo Fukuda.
Lee, 66, is the first president from a business background in a nation that has been ruled largely by ex-generals or former rights activists during its turbulent 60-year history.

He paid tribute to the economic miracle which followed the devastation of the 1950-53 Korean War but stressed South Korea must find a new growth engine.

"We are at the crossroads where the destiny of the nation over the next 60 years will be determined," Lee said in a speech after swearing the oath of office.

"I hereby declare the year 2008 as the starting year for the advancement of the Republic of Korea," he added, using the formal name of the nation founded in 1948.

Lee won a record victory margin in December's presidential election with his "Economy, First!" pledge.

The former construction CEO and Seoul mayor, nicknamed "The Bulldozer" for his forcefulness, has vowed to boost growth, cut high youth unemployment and raise competitiveness in the face of challenges from China and Japan.

"Our number one concern is how to find a job after graduation," said student Yu Byung-Kwan, one of thousands of members of the public chosen by Internet lottery to attend the ceremony.
Lee stressed his practical approach would apply both to the economy and to dealing with his nuclear-armed communist neighbour.

He expressed willingness to meet North Korean leader Kim Jong-Il whenever necessary and said his attitude to inter-Korean relations "will be pragmatic, not ideological."
Lee reiterated promises of massive economic aid if the North fully scraps its nuclear weapons "and chooses the path to openness."

After a decade-long "sunshine" engagement policy with North Korea, seen by critics as a one-way street, Lee wants to tie South Korean aid more closely to nuclear disarmament.

The South's 680,000-strong military was put on alert "against any possible contingencies," the Joint Chiefs of Staff office said, an apparent reference to North Korea which has yet to comment on the new administration in the South.

Lee also promised a stronger strategic alliance with decades-old ally the United States, and better relations with China, Japan and Russia.

The new president was to hold talks later in the day with Fukuda as well as with Rice, who is touring the region to try to end an impasse in a six-nation deal on scrapping the North's nuclear programmes.

But it was the economy that was the focus for much of his speech.

"Economic revival is our most urgent task," he stressed. "Our nation's competitiveness has fallen and instability in the resource and financial markets threatens our economy."

He said South Korea's middle class had "crumbled" and the lives of ordinary people were becoming harder. The country was also rapidly becoming an ageing society due to a record low birthrate.

"New engines of growth must emerge assuredly, the economy grow vigorously, and more jobs be created," he added, pledging to start by slimming down the government.

He promised privatisation, tax cuts and major deregulation among other business-friendly policies aimed at raising the growth rate from around five percent last year to seven percent by 2013.

"Opening the market to the foreign sector is an unavoidable mega-trend," he said, vowing to pursue free trade pacts.

South Koreans gave their new leader a generally warm welcome.

"I greet a president who is willing to work hard for our economy," said Lee Yong-Sup, 46. "We need a fresh start. I believe he can do it."