SEOUL (Reuters):

Right-wing businessman Lee Myung-bak swept to victory in South Korea's presidential election, his promises to revamp the economy pushing aside concern about his ethics, official results showed yesterday.

With almost all 23 million votes counted, the preliminary official tally gave Lee 48.6 per cent of the vote, far ahead of his nearest rival, liberal candidate Chung Dong-young at 26.2 per cent.

Speaking last night after it became clear he had won, Lee told chanting supporters: "I will bring an economy that is now in crisis back to life."

Pre-election polls showed that voters' only real concern was the economy, widely considered to have underperformed during the five-year term of outgoing President Roh Moo-hyun.

Stock market boost

The U.S. State Department congratulated Lee on his victory. Roh had strained ties with the United States by criticising those in Washington he felt took too hard a line with North Korea.

Expectations that Lee would win have been helping the stock market for days, especially those stocks reckoned likely to benefit directly from his economic policies.

He has pledged to lift annual economic growth to 7 per cent — compared with an average of just over 4 per cent under Roh.

Economists warn it could be a struggle because the major U.S. export market may soften and competition from neighbours China and Japan is becoming increasingly tough.

The president-elect will be under strong pressure to implement tough reforms to make South Korea more competitive in the advanced areas of its economy, such as finance, and to compensate as its manufacturing industries are increasingly priced out of the market by lower-cost producers.

The winning margin was by far the largest since the country ditched its autocratic past and turned to democratic elections 20 years ago, and reflects Chung's inability to shake off his links to unpopular fellow liberal President Roh.

Analysts say it was Lee's promise to boost the economy and his contrast to Roh that attracted voters to the father of four who rose from abject poverty to head, at the age of 36, what became one of the country's biggest construction firms.

Financial scam

Despite his popularity, Lee has been dogged by allegations of involvement in a financial scam, a problem that flared up just before the election when parliament agreed a special investigator should look into the securities fraud allegations.

The investigation is unlikely to be completed before Lee's inauguration on February 25 when he will become immune from prosecution, but it could undermine his authority if any link to the fraud is established.

It is also unlikely the liberals will give up their attack over the issue before parliamentary elections in April, when they stand to lose their majority in the National Assembly.