The Korean Democratic Party of the outgoing Premier Moon Jae-In won the political elections in South Korea, the first in the world since the Coronavirus pandemic broke out.
Wanting to be optimistic, it could be considered the (first) ‘nemesis’ of COVID-19. For the mythology of the ancient Greeks Nemesi (in Greek Némesis) was the goddess who ‘distributed justice’, dealing with unresolved or unpunished crimes and giving honors or penalties according to what was due, inflicting pain especially on the wicked and the less grateful in fate: having been South Korea among the first countries affected by the ‘black swan’ of the epidemic, this electoral round gave many the impression of witnessing the resilience of democracy (in the case of South Korea, very young) in times of emergency when, appearing more efficient, authoritarianism (in the world) entices and, at times, imposes itself. In other words, democracy VS COVID-19, 1 to 0.
From this point of view, especially below the 38th parallel, postponing the opening of the ballot box for the renewal of the Legislative Assembly (the unicameral Parliament) was not an option considered, despite the global health crisis: the South Korea’s conquest of democracy goes back less than thirty years, and not even the 2009 H1N1 swine flu epidemic had prevented the country from voting. This vote, however, was the first after the approval of the new electoral law, which allowed for the first time the vote to eighteen-year-old citizens and which introduced a mixed majority and proportional system for the allocation of a part of the seats: single-shift majority for the 253 uninominal electoral constituencies and proportional for another 47 seats, so as to compensate for the small parties, even those allies and satellites of the larger formations.
The outcome was clear, leaving no room for doubt: with four more days of voting, 66.2% of the population (the highest figure since 1992, when it reached 70%) went to the polling stations, respecting the strict rules to avoid contagion – “Taking into account the incubation period of Covid-19, we have to wait a week or two to see if the preventive measures adopted for the vote really worked,” said the vice minister of health of Korea South, Kim Ganglip – and the Moon Jae-In Korean Democratic Party (PDK), together with his allies of the Party of Citizens (Platform Party), obtained 180 seats out of the 300 (163 seats in the majority and 17 in the proportional) of which he is the Assembly was made up, the largest majority since 1988. In particular, in the northern areas of Seoul, the PDK won 103 seats out of the 121 seats available for the majority. On the other hand, the conservatives of the United Future Party (UFP), the first opposition force, and its allies of the Future Korea Party obtained 103 seats instead (84 in the majority and 19 in the proportional one). The small parties conquered 12 parties while only 5 seats were conquered by the independents.
The pandemic, as we will see, has not reversed the election result, but its effective management has been decisive in the choice of voters and has certainly rewarded the outgoing Premier Moon Jae-In, given that his personal consent has increased by more than 10 percentage points in the last month. The ‘South Korea’ model, together with the Israeli one, was considered, among democracies, on the basis of current numbers, one of the most effective for reducing the possibility of spreading the infection: social distancing, but without resorting to lockdown thanks to a massive reliance on tests and tracking of virus positive and contacts through digital applications and digital bracelets. Great attention is paid to return infections and for this reason Seoul has decided to test all those arriving at the airports – immediately those who have symptoms, at most in the next three days – and then to trace their movements.
But the threat of Coronavirus is far from defeated, although yesterday, for the first time in nearly two months, South Korea has recorded fewer than 20 cases of new infections. The Disease Control and Prevention Centers (KCDC) have confirmed two more deaths and 18 new cases of Coronavirus (nine of which are ‘imported’), the lowest number since February 20. In the country there are a total of 10,653 cases of COVID-19 and 232 deaths. The alert remains high also because some patients who had been declared cured after contracting the infection tested positive for the virus again: according to Kcdc estimates, they are 173 in total, ten more than the previous day. Instead, 7,937 people were healed and 992 in total ‘imported’ cases.
In addition, as in the rest of the world, the health emergency is accompanied by the economic emergency. The International Monetary Fund spoke of the ‘Great Depression’, although, as regards the emerging Asian economies, the forecasts seem to be less black than in other countries: for South Korea’s GDP, IMF forecast a 1.2% contraction in 2020.
However, the great dependence on China (its main trading partner), the worldwide contraction that will affect the technology and auto sectors, require Moon Jae-In to do what to do in the coming months, taking into account the growing difficulties of the population without, however, abandon its national economy reform program to make it more ‘anthropocentric’ and less linked to the financial centers and the ‘cheabol’, the large South Korean multinationals, whose corruption scandals have not been forgotten.
Related to the economic question, that of foreign policy: first of all the dialogue with North Korea by Kim Jong-Un, now stalled, then passing through relations with the United States and with China, without forgetting the recent complications of relations with Japan and with Russia. What will change? How does Moon plan to face the economic challenge that will follow that related to Coronavirus? We asked Ross Darrell Feingold, an expert analyst on the Asian continent.
Over 65% of those entitled to go to the polls. How do you explain this high turnout?
The impressive turn out for a National Assembly election has several factors. The most recent presidential election in 2017 had a turnout rate of 77%, so, some of that same enthusiasm might have resulted in a trend. No doubt, enthusiasm for President Moon Jae-In’s policies as compared to the alternatives might have also played a role, especially as the initial challenges in managing the virus outbreak were quickly overcome and the government has generally received domestic and international praise for its efforts. Early voting and absentee voting were also factors.
Which political force favored the high turnout?
We should not under estimate the long term damage to the conservative “brand” from the corruption scandal of conservative president that resulted in the removal from office in 2017 of president Park Geun-hye. Her former party, now known as the United Future Party after a recent merger of conservative parties, previously known as the Liberty Korea Party and earlier known as the Saenuri Party and Hannara Party (or “Grand National Party”), has obviously yet to recover from the scandal. It is clear that the voters do not want the conservatives to return to power.
Despite Moon’s electoral reforms to accentuate multipartyism and the multiplication of small parties, does South Korea remain nailed to substantial bipartisanship?
During the democracy era, South Korean voters have shifted between conservative and more socially liberal presidents and parties multiple times. The major parties rarely act in a spirit of bi-partisanship, and the partisan divided is similar to what occurs in other democracies around the world. What is interesting to watch in the current period is the fact that for now, voters want to give the liberal Democratic Party solid control of both legislative branch to go along with the control of the executive branch. Whether this will be a long term electoral result or is only once again a period of current (but not long term) voter preference remains to be seen.
Does regionalism (stronghold areas of a political force) prove to be a characteristic of the South Korean political world?
Regionalism continues to be a part of South Korean politics even if it might not be as strong as it was in the past. The conservative parties continue to do well in southeast Korea. In the capital Seoul and other parts of the country the progressive parties did well. At least for the capital, as in other capitals or large cities, it is not unusual for voters to favor more progressive politicians.
The pandemic marked these elections so much that they turned them into a referendum on the Moon government. “Winning the war on COVID” was the government’s slogan. Was Moon management appreciated? Why? And what measures have convinced public opinion most?
The initial few weeks of response to the virus in February did not go well for the Moon administration, with the spread of the disease and increase in the number of infected persons appearing to overwhelm the government for a time. However, just as quickly, the government improved its performance dramatically. South Korea of course has an enormous number of highly educated professionals in public health, sciences, and medicine, along with the software and hardware ability to support public policy during this emergency. Thus the government was able to mobilize resources in both the public and private sector. Key aspects of this include wide testing of the population, successful treatment of patients, and major companies offering to manufacture needed personal protection equipment, ventilators, or other hospital equipment. The results occurred quickly, and the voters valued a government that could safe guard the public despite the challenges of having a large number of recent visitors from China, a large number of local persons who recently visited China, and the unknown virus situation in North Korea.
Was Moon’s communication effective?
Moon is a fairly effective user of social media, which is common in Asia especially for more progressive politicians. During the 2017 presidential election he was far more effective at using live streaming to engage with voters than his main opponents. What Moon lacks on his own in messaging, his party has the support of younger voters, who amplify his messages on social media.
Was the Moon government timely for voters?
Not only was the Moon government successful at capturing voter support for its response to Covid-19, but there were several other issues for which the government successfully captured public sentiment. These include the government’s willingness to more forcefully investigate and prosecute incidents of “revenge porn” and other online abuse of women (an issue that has gotten significant attention in Korea following several high profile case), and, Moon has refused to agree to United States demands that Korea dramatically increase the amount Korea contributes to the cost of US troops in Korea. The timing to stand up to the US was perfect for Moon and the Democratic Party, as the negotiations occurred shortly before the election.
According to the numbers, how would you define the success of the PDK?
The Democratic Party and its allies won 180 seats in the 300-member, single-chamber National Assembly, up from the current 120. The conservative coalition won 103 seats. This victory can be described as overwhelming.
Do you think the outcome of the elections would have been different if COVID-19 had not been there?
Ever in the absence of Covid-19, the progressive coalition led by the Democratic Party would still have done well in this election. One significant reason is that the conservative coalition is still unpopular. Even if some votes went to smaller parties rather than the Democratic Party and its allies, the latter would still have been the largest party in the National Assembly after this election.
Although initially Moon’s work against coronavirus was not highly appreciated (an online impeachment petition had even been proposed), his personal consent, in the last month, reached 54.4%. If the elections have certainly become a referendum on the government’s action against COVID-19, what weighed the efficient and capable image of Moon has weighed on the positive result of the PDK, coming to convince new voters, coming from abstention or ‘opposition?
What is interesting here is that the South Korea is not a parliamentary system like in Western Europe. The president is separately elected from the National Assembly (in an election that does not occur simultaneously), and the president appoints the prime minister (subject to National Assembly confirmation) and can appoint the other ministers (and avoid National Assembly approval through the use of parliamentary procedures). Despite this, the National Assembly election was still a referendum on Moon’s job performance, and he clearly has the support of Korea’s voters.
In 2002, the IMF recognized that a key lesson in South Korea’s rapid recovery following the Asian financial crisis was the importance of the political leadership of the then president Kim Dae-jung who was able to “unify the country to overcome the crisis. ”Do you think Moon is able, like his teacher, to do the same and that’s why he has seen his consensus grow?
Unlike South Korea’s recovery from the Asian Financial Crisis in the late 1990s, the virus situation requires different kinds of actions from the president and his government. Amid the Asian Financial Crisis, the government needed unity for its economic policies such as allowing the sale of assets to foreign buyers, accepting aid from the International Monetary Fund, and the donation of gold to reduce foreign debt. Avoiding social unrest by the unemployed or those whose personal wealth was reduced in valuewas also important. Creating unity is not so much a priority now, because everyone supports stopping the virus and treating the sick. Rather, what the public wanted to see is a government that quickly implements successful policies to slow the virus spread, and effectively treats the sick. For now, Moon has achieved that.
Do you think that the opposition has lost ruinously and what has penalized it? Many argue that it was penalized for having only criticized the government, without offering alternative solutions and without cooperating with the government even when the measures it adopted seemed to give good results. What do you think about it?
The conservative opposition offers little to South Korea’s voters. They have few compelling personalities, few compelling policy ideas, and retain the damaged brand from the President Park scandal. Their only reason to exist appears to be to resist “détente” with North Korea. Although resisting détente with North Korea retains support among some voters who do not trust North Korea to keep its word in any negotiation or agreement, for now the overwhelming majority of voters prefer to maintain te dialogue and reduce tensions with North Korea. This really leaves the conservatives with little to offer.
On the basis of religious belief, how did the electorate divide in these elections?
Christianity has a strong role in South Korean society. President Moon is a Catholic who attends church, and former president Lee is a Presbyterian and church elder. On the other hand, former President Park was reportedly an atheist, and former president Roh was a non-practicing Catholic. Given the success of a progressive political party, the Democratic Party, conservative social policies are not necessarily a winner in South Korean elections. However, it should be noted that President Moon said he opposed homosexuality during the 2017 election though more recently he criticized discrimination against sexual minorities; however, international non-government organizations continue to criticize his lack of action on homosexual rights.
Has the low growth of the economy (just over 2% approximately) penalized the PDK in recent years?
Prior to the virus outbreak, the expectation was that the Democratic Party would be hurt in the National Assembly election because of slow economic growth. Whether or not Moon and his allies could have successfully blamed the US-China trade war is unknown, and Moon was making an effort to build better relations with Xi Jinping so that South Korea could benefit from strong trade with China, and South Korea remains a supporter of finishing negotiations for the Regional Comprehensive Economic Partnership regional trade agreement and is a potential member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Most likely, as with other issues, the voters would not trust any of the other political parties to manage economic policy in an time of uncertainty due to rising trade tensions.
Are the scandals on recommendations (‘gold spoon’) costing the resignation of the Minister of Justice Cho Kuk a distant memory?
Cho Kuk served first as an aide to President Moon and briefly in 2019 as Minister of Justice. Scandals involving alleged plagiarism while a student, wrongdoing in his business dealings, and falsification of his daughter’s academic credentials resulted in his resignation as minister. Unlike other Korean politician scandals, the monetary value of the wrongdoing appears relatively small, and appears to have little relationship to his official duties while in government. It certainly does not have anything to do with President Moon. Thus, the public moved on pretty quickly from this.
Has Reverend Jun Kwang Hoob’s movement proved to be a paper tiger for Moon?
Reverend Jun Kwang-hoon, a conservative Presbyterian pastor, was able to mobilize his most ardent supporters in rallies against the government last year. It appears that some media reports may have over estimated Jun’s support, especially the conservative media publications in Korea. It is relatively easy to mobilize the most ardent supporters but this is not the same as a mass movement. Key issues for Jun included calling for Cho Kuk’s resignation, and also criticizing Moon’s détente policies towards North Korea. By the time the National Assembly election occurred, Jun was indicted for election law violations and defaming President Moon. Some of his supporters were also accused of breaking quarantine and social distancing guidelines when they held church services with large numbers of attendees; this was a terrible public relations move by his supporters amid the virus.
In which voter bands did Moon win? Despite the inequalities perceived by young people and women, was their vote still for the PDK?
Moon’s competent governance over the past three years on domestic policy attracts supports across demographics. Certainly his North Korea policy attracts support from younger voters through voters in their 20s to 40s, and up until older voters who are more conservative about North Korea. Voters around Moon’s age (67) or younger who respect his efforts to achieve democracy during the 1970s and 1980s also favorably view him. For women voters concerned about sexual harassment, and younger voters concerned about income inequality, the conservative parties were certainly not a more attractive option, given their history of association with male dominated politics and/or South Korea’s chaebol, the family controlled conglomerates.
The president has repeatedly urged “to change the paradigm that household income falls and economic inequalities grow in spite of economic growth”. Moon particularly lashed out against the national economic model based on family-run corporate mega-conglomerates such as Samsung, Hyundai and LG. This system, which has lifted the country out of poverty in the past, is now outdated, according to the president. Moon has promised to address the profound inequalities in South Korean society by redistributing wealth and restoring the middle class. He spoke of “people-centered economy”, “income-driven growth”. Does Moon’s PDK have the numbers needed to reform the Commercial Law, introducing measures that limit the power of large conglomerates, the ‘cheabol’, attempts that have always been opposed (thanks to the numbers) by the opposition? And will it do it, even if the economic moment is critical? Will Moon still be able to pursue this fight against inequality or will the economic crisis force him to leave these issues to the next progressive administration?
All recent Korean presidents have pledged to break the power of the chaebol but with only limited success. Now is probably not the time for significant change, at least until there is more visibility on the outcome of the virus and trade disputes situations and global economic growth becomes stable again. Keeping in mind that Moon cannot run for re-election in 2022, chaebol reform might not be a priority in the next two years. Rather, Moon might have more success working with the National Assembly on initiatives to create entrepreneurial opportunities for younger persons, improving opportunities for start-up companies to succeed, and continuing to make South Korea attractive to foreign companies, all of which can create opportunities for younger workers.
The IMF spoke of the ‘New Great Depression’, but also said that the emerging economies of the Asian region will be the only ones globally not to slip into recession during 2020. It is comparable, for South Korea, shock of the Asian crisis of 1997 with the economic crisis following COVID-19?
We should be careful about making such comparisons given how different the circumstances are. The factors that caused the 1997 Asian Financial Crisis included significant debt owed by governments and companies in the region, denominated in US Dollars, that the borrowers were unable to repay when Asian currencies devalued versus the US Dollar. Weak government institutions, poor corporate governances and less transparency in the political and business worlds were also factors; although these factors still exist today in Asia they were far worse at the time of the Asian financial crisis. The COVID-19 situation is a health crisis and it will take the disappearances of the virus, a vaccine, and/or an antidote for confidence to return and economies worldwide including in Asia to operate normally again. In addition, the COVID-19 crisis began when the outlook for 2020 economic growth in Asia was already poor, amid the US-China trade dispute, social unrest in Hong Kong, uncertainty over global trade agreements and other policies, regional political tensions over sovereignty disputes, and the upcoming US election. It would be a simplistic assumption to expect Asia to have a rapid economic recovery any time soon, as much will depend on public health, economic, and political conditions in China and the United States. In Asia’s export dependent economies, policy makers have limited options to create domestic economic growth if global conditions are unfavorable.
In this health and economic crisis, South Korean industries, mainly the automotive and electronics sectors, experienced an initial shock in the supply chain. These COVID-19 problems are the latest wake-up call for the South Korean economy heavily dependent on trade, particularly towards Beijing. As demonstrated by the Korea International Trade Association, in 2017 the participation rate of South Korea’s global supply chain was 55% in value and ranked sixth out of eighteen large economies within the OECD. In light of this, the Moon administration has pursued policies – many of which have already been introduced by its predecessor – aimed at diversifying the economy and making it less dependent on exports, with a greater focus on high-value services. South Korean exports remained substantially stable in March ($ 46.9 billion), but will the trend of redefinition of supply chains increase so as to make the country less dependent on foreign countries?
Supply chain diversity has been a popular topic ever since the Trump Administration took office and US-China trade tensions began, though some governments and companies began this movement prior to 2017. In recent months both before and during the COVID-19 crisis, this topic has received even mre attention, and in recent days Japan also announced a plan to provide financial assistance to companies that relocate facilities from China to other locations in Asia or to Japan. Diversifying supply chains is an inevitable trend and follows what transpired earlier in the post World War II era. Manufacturing that previously occurred in Hong Kong, Japan, Korea, Singapore and Taiwan in the 1960s to 1980s relocated to China, Malaysia and Thailand for reasons such as cost, environmental concerns. There are three important points to keep in mind in conversations about moving supply chains out of China. Given how long and how much of the production chain (downstream / components suppliers) has occurred in China, it is difficult and costly to recreate in other locations this “ecosystem”. Trade agreements such as RCEP, the Phase One US-China agreement, or China’s bilateral trade agreements with other trading partners are a dis-incentive to relocate from China. Finally, companies will need to maintain some manufacturing in China for purposes of selling goods into the enormous domestic Chinese market.
South Korea’s health minister, Park Neung-hoo, said that ending the Coronavirus pandemic in the country, which has also successfully managed to contain its spread, is “almost impossible” in the short term. “This struggle will drag on for months, or even for years,” warned the minister, while the South Korean health system is preparing for the eventuality, deemed highly probable, of a second wave of infections. Kim Woo-joo, infectious disease expert from Seoul’s Guro-gu University Hospital, warned that despite the recent slowdown in infections, the country lacks plans for the worst-case scenario, namely the collapse of the healthcare system in the face of a sudden an increase in infections, as happened in other parts of the globe and in the city of Daegu. Do you agree and what is the government doing to deal with a possible second wave, given that for about three weeks South Korea has recorded a constant trend of new daily infections, which are around 100 and several patients, recovered, have they returned to being positive for COVID-19?
Given the uncertainties about COVID-19, it is prudent for policy makers and elected politicians to wwarn the public about second waves and other possible recurrences such as subsequent lockdowns, continued school closures, or open-ended bans on large public events. To the extent that these warnings are given with sufficient supporting evidence, and given by officials who have earned the public’s confidence, it is more effective in winning over the public’s adherence to the safety measures that public officials ask the public to follow. In the context of South Korea’s National Assembly election, we see that the public has confidence in the public officials even when the officials are warning that bad times might return, and the voters thus voted for the ruling party’s candidates who are not promising a return to only good times.
The Bank of Korea injected $ 12 billion into South Korea’s banking system in the first round of dollar-denominated loans secured by the currency swap line with the US Federal Reserve. The operation will serve to stabilize the currency market, and was carried out on March 31 through an auction lasting 30 minutes. South Korean lenders were able to take out seven-day debt securities for a total amount of $ 2 billion, and 84-day debt securities for a total of $ 10 billion, according to a statement released by the South Korean central bank. In addition, the Central Bank of South Korea (Banca do Corea, Bok) announced last month that it will inject an unlimited amount of liquidity into the country’s financial institutions over the next three months, until the end of June, to counter volatility. caused on the market by the new coronavirus pandemic. “The Bank of Korea has decided to provide unlimited liquidity to financial institutions to reduce the economic spillovers of Covid-19, and to remove the uncertainties weighing on the financial market,” reads a note from the central bank according to which the Bok will expand the audience of companies and bonds subject to central bank repo operations. Starting in April and until the end of June, the central bank will make regular purchases of local bonds on a weekly basis. Furthermore, in light of the growing economic impact of the Covid-19 pandemic, “the board will conduct accommodative monetary policy to mitigate downside risks and mitigate volatility in financial markets,” the Bank of Korea announced a few days ago, announcing to have confirmed its key reference rate at an all-time low of 0.75%, citing the need to verify the effects of the current monetary policy for longer. Are Bok’s moves right and necessary?
BoK’s moves are similar to actions by central banks in other economies have done, and are the obvious measures for monetary authorities to take in order to ensure the financial system has sufficient liquidity. In the political space, the government will also need to ensure that it has sufficient policy measures in place to provide access to funding for corporates whether large or small-and-medium size, as well as for individuals. That is, simply injecting cash into banks is not enough; the banks must be willing to make the funds available to borrowers so that economic activity can return.
The Moon government has announced that it intends to double the total amount of the financial aid package for companies affected by the coronavirus, bringing it to 100 thousand billion won (80 billion dollars). Moon also announced the establishment of a series of special funds to stabilize the country’s equity and bond markets. The president promised that the state will act as a “powerful barrier” against the incoming global economic and financial crisis, during the second session of the emergency economic council convened by the government. “No company will go bankrupt due to a temporary lack of liquidity,” Moon promised. What is the government doing for business? And is it enough?
Similar to other countries around the world, and separate from the BoK actions, the Moon administration will provide financing and liquidity programs for companies, and intervene in the stock and bond markets. The latter is similar to other countries in Asia, where government operated funds buy and sell stocks just as other institutional investors do. One trend we see around the world is that these initial packages are quickly spent in their entirety, and then a subsequent package is necessary. The good news for the Moon administration is that it now has an even greater majority in the National Assembly to approve additional, larger assistance packages. The bad news from a transparency perspective is that given how weak the opposition is, there is no strong oversight from an opposition party. The National Assembly being a uni-cameral legislature, there is no upper house to provide oversight either.
The South Korean Information and Communications Industry (ICT) will suffer heavily from the economic fallout from the coronavirus pandemic, especially in terms of lower business spending. This is the forecast made a few days ago by the research firm Idc Korea according to which global spending on ICT systems will drop significantly this year due to the use of companies in emergency management protocols and short-term cost reduction measures. For this reason, he company has revised downwards the sector’s annual growth projections to 2.4 percent, compared to the previous estimate of 3.1 percent. How harmful could this collapse be for the South Korean economy and what is the Seoul government doing or at least doing to avoid the disaster in this sector?
Trade disputes especially involving technology products began to have a negative affect on South Korea’s exports in 2019, especially to the extent South Korea exports semiconductors and other components to manufacturing locations such as China, or higher tariffs imposed by other countries on Made in Korea consumer electronic products. The outlook for 2020 was for an improvement especially helped by the Phase One US-China trade agreement. The earlier optimistic 2020 GDP forecasts will need to be adjusted dramatically down, and take into account not only a significant all in demand for components and finished electronics, but other products that had previously made up for the 2019 fall in electronics exports, such as autos.
Can black forecasts also be made in the auto sector? How damaging can an auto sector crisis be to the South Korean economy? What is the government doing or what should it do to avoid it?
Auto exports were a bright spot in 2019 with the value of auto exports increasingly significantly even though the number of units exported fell slightly. Amid a dramatic fall in global demand there is little the government can do to increase exports though it can of course provide financial assistance to the sector as it is doing broadly across the economy. Government can also play a role in negotiations between unions and auto makers, as the workers are unionized and any suspension of production will require negotiations and agreement. The labor-friendly Moon administration can help ensure an agreement and labor peace so as to avoid union protests, which would of course be a health risk amid the virus situation.
Finance Minister Hong Nam-ki, during a council of South Korean economic ministers, clarified that “There is a possibility that unemployment may increase among part-time workers and small business owners. According to our estimates, applications for access to unemployment benefits increased in March “. In particular, last month the new applications would have been about 160 thousand, compared to 125 thousand in March 2019. The official data will however be published by the South Korean government next week. In February, the South Korean state paid a total of $ 643 million in unemployment benefits, a 32 percent increase over the same month last year and a new all-time high for that country. The overall number of beneficiaries has increased from 16 percent on an annual basis to 536 thousand people. Is it enough how much the government has made available against unemployment? Are there any less considered categories? Should the government do more?
As in several neighboring countries, South Korea has a rapidly aging population many of whom lack sufficient assets to retire. This group is constantly seeking employment, though the only jobs available are typically part time without benefits. Their ability to access the programs announced by the government so far is unknown, and this group might require additional assistance in future rescue packages. Policy makers also need to consider the large numbers of Koreans who work overseas (often for Korean companies) and returned home and are now jobless who might lack a support network after having lived overseas. Another group to monitor are furloughed employees of US military bases. Although the furlough is also related to the status of bilateral negotiations over cost-sharing, the furlough of these employees is a political sensitive matter.
The government of South Korea, like other countries in the midst of a coronavirus pandemic, has decided to resort to the so-called “helicopter money”, through direct allocations of cash to families. The appropriations, Moon said, will take place in the form of “emergency funds for disaster mitigation”, and will go to almost all households, except for the highest incomes. Moon also outlined plans to approve an additional supplementary budget shortly after the April 15 general election, which provides for the allocation of one million won (approximately $ 820) for the families of four with equal gross income. or less than 70 percent of the national average. According to government estimates, 14 million South Korean families will be eligible for the contribution, for a total of 35 million people. Are they sufficient resources and will citizens be able to access them quickly?
For unemployed individuals, and certainly households with school age children, these amounts are helpful but not enough. South Korea cost of living is high, especially housing costs in Seoul and other large cities. South Korea is especially at risk for disruptions to global supply chains for food, as it imports most of its grain needs, which could result in higher food prices. As for accessing the funds, South Korea is one of the most technology advanced, or “wired” societies, thus the distribution of funds should occur quickly.
Overall, how do South Korean citizens evaluate the economic measures put in place by the government and these have had an impact on the electoral outcome?
Based on the experience of the Asian Financial Crisis when many South Koreans donated their personal gold jewelry to help pay foreign debt, it appears that when South Korea faces an external threat of the magnitude of Covid-19, society is able to unify. For now the public is largely supportive of government efforts to fight the virus and address economic risks. This was reflected in the overwhelming election success for the Democratic Party in the National Assembly election.
How high is the risk of social disorder resulting from the economic crisis? Will South Korean democracy and the Moon government be stable enough to get through this phase?
South Korea democracy is stable, having had several peaceful transitions of power between the liberal and conservative political blocs over the past 25 years. In 2017, the government, judiciary and National Assembly generally functioned as designed in the Constitution when it became necessary to deal with the corruption allegations against former President Park, her removal from office, and an early election for a new president. Currently there are no extreme leftwing or rightwing politicians with a significant following, even if Moon is too progressive for some of the voters or if conservative politicians or personalities like Reverend Jun are too conservative for many voters especially younger voters. However, South Korea does have a history of social unrest, and specifically, large protests over domestic politics, foreign policy or economic issues. As in other countries, the risk of public protests is somewhat limited so long as the public is concerned that large gatherings creates the risk of virus infection.
Moon said the need to increase tax spending is that this need will already be seen in the next budget maneuver. What can we expect from the next budget forecast? Is it to be ruled out that the Moon government can decide on a Covid-tax, a property tax to reduce inequalities in the crisis after the pandemic?
The Moon administration will work with the National Assembly to provide additional financial assistance packages to industry and individuals. As in other countries, this will be a combination of low interest financing for companies, tax reductions for businesses, property taxes, and income taxes on individuals, and cash handouts. What distinguishes Korea from other countries the role of the chaebol and that government can work closely with a small group of companies to have a unified strategy to create employment (or at least minimize unemployment) and to create policies that help boost export demand in key markets for Korean goods.
After the ‘historic’ image of Moon and Kim Jong Un embracing on the 38th parallel and several meetings between Trump and Kim, the inter-Korean dialogue between Seoul and Pyongyang, on which Moon has focused much of its political capital, seems to be now stalled, despite recent messages sharing efforts to contain the virus. Two days ago North Korea made new missile launches and denuclearization appears far away. Speaking of the Coronavirus, Pyongyang propaganda has accused Seoul of ‘biological warfare’. How much has the inter-Korean dialogue weighed in this election? Did you favor Moon?
Efforts for dialogue have been appreciated
One very interesting result from this election is that despite the inter-Korean dialogue having stalled, the voters overwhelmingly supported Moon’s party. In other words, voters endorsed Moon’s détente policies towards North Korea, along with endorsing Moon’s policies to manage the economy, manage Covid-19, and relations with the United States, China, and Japan. For now the voters clearly do not want to return to the conservative policies towards North Korea of the two previous presidents, during which there was little bilateral negotiations and tensions were even higher.
How will political and economic relations between South Korea and North Korea evolve?
The previous analyses that developed over the second half of 2019 after détente began to stall are for now no longer applicable, simply because of the Covid-19 situation. So while we could have discussed how Moon will diverge from Trump with regard to North Korea, and what North Korea might do to split China, Japan, the United States and South Korea, for now these analyses are irrelevant. There are a few knowns and many unknowns. We know that South Korea must focus on resolving the virus situation and avoiding a serious recession. We know that the United States is demanding that South Korea pay more for the cost of US troops based in South Korea. We know that North Korea has commenced testing short range missiles again, and can, at any time, resume nuclear or long range missile tests. What we don’t know is how serious the virus situation is in North Korea, as there are few foreign visitors and official media has issued only optimistic statements. We do not know the food production and overall economy situation, which were already suffering due to sanctions and will suffer more due to the virus whether domestically or with its few remaining trading partners such as China and Russia. Unfortunately, we also know that when the food or economic situation is desperate, North Kore might take provocative actions in order to extract aid from China, Japan, South Korea or the United States. The Trump Administration is unlikely to repeat the mistakes of previous US presidents, but South Korea under Moon might be willing to provide more aid notwithstanding US objections.
Although the final decision is up to the US, would South Korea be willing to ease sanctions against Pyongyang in this moment of pandemic?
Korean unity in a time of crisis, for which neither Korea is responsible, is a situation where the two Koreas might act in unity, or, at least, South Korea might be willing to provide aid. This is certainly more likely under President Moon than if a conservative president was in office.
A group of defectors from North Korea to form a political party called the “South-North Unification Party”. Did they manage to have representation in Parliament and what is the life of a North Korean defector in South Korea? Are there discrimination? Do they continue to want dialogue with Pyongyang?
The Inter-Korean Unification Party did not win any seats. However, the frustrations of defectors who have re-located to South Korea are well documented. Just as in Italy where language and dialect differ across regions, the same is true in Korea. The vocabulary and accent differ within regions, and dramatically between north and south. Thus, defectors are easily identified when they speak. Beyond language discrimination, defectors have difficulty integrating into a modern, competitive society for which most of the defectors lack job skills, unless they were government officials or have other technical skills in demand in South Korea. Finding jobs that pay a living wage is a significant problem, especially after subsidies from the South Korean government run out. Although most South Koreans want to avoid a war with the north, they are not eager to fund the costs of a massive rebuilding of the north’s economy, nor are they eager to fund the cost of defectors living in the south when so many South Koreans struggle economically. This is also similar to Europe, where even though many are sympathetic towards migrants from the middle east and Africa, there is a limit to how much public money people wish to spend assisting migrants.
Not all ex-deserters want dialogue: Ji Seong-ho and Thae Yong-ho have been running for a seat at the National Assembly on the conservative opposition lists “United Future Party” (UFP). Did they manage to get into Parliament? And, in general, is the opposition very compact in criticism of North Korea and dialogue with Pyongyang?
Ji Seong-ho and Thae Yong-ho were both elected to the National Assembly. They will provide a powerful counter-voice to the efforts by the Moon administration to continue détente with North Korea. In addition, they will certainly provide a target for North Korean media, which will make it interesting to watch how the Moon administration responds. Hopefully the Moon administration will criticize any North Korean verbal and print attacks on Ji and Thae, as they are parliamentarians even if they are opposition politicians who will criticize Moon. Ji has traveled around the world to speak about North Korea and was a guest at the 2018 State of the Union address in the United States, and he will maintain a profile in international media or with foreign governments as a critic of détente.
In recent years, relations between Seoul and Washington have experienced ups and downs: from the tariff war to the North Korean and Chinese question, without forgetting, without forgetting the tensions on the budget for American troops in South Korea. Taking these into account dossiers, was Moon’s way of handling relations with the United States appreciated by voters? Why?
Moon is handling US relations similar to his former boss, President Roh Moo-hyun. During Roh’s presidency there was détente with the north (which the US did not always agree with) and disputes about the US military presence. Many South Koreans supported Roh on both issues. It seems that South Koreans want a president who will stand up to the US, and in this regard Moon is a contract with the two preceding presidents Lee Myung-bak Park Geun-hye. Whether or not this is because of support for Moon’s policies or President Trump’s style is a factor is hard to say, though no doubt some South Koreans were alienated by the Trump Administration’s demand to renegotiate parts of the bilateral free trade agreement and more recently demands that South Korea pay for more costs of the US troop presence.
After these elections, how will relations between the United States and South Korea evolve in the future, without forgetting that the US presidential elections are held in November? Why?
Unless North Korea engages in provocative actions in the coming months that are similar to its missile and nuclear tests in 2017, the likelihood is low that Korea relations will factor in the US presidential election. The main Asia issue in the election will of course be China, with Joe Biden and President Trump competing to claim they are the most tough on China. Perhaps if the Covid-19 situation had not occurred, President Trump would cite his success in 2018 and 2019 to get Kim Jong-un to reduce tensions and pause missile and nuclear tests. However, the absence of definitive agreements especially about North Korea’s nuclear programs makes it a difficult talking point for President Trump, because critics will say that no definitive agreements were reached and that Trump’s kind words about Kim are inappropriate.
“It is imperative that a fair, balanced and comprehensive agreement be signed as soon as possible,” said US Defense Secretary Mark Esper. The White House has come to ask for 5 billion dollars against the current 900 million for US troops in South Korea. Negotiations risk a long stall, while about 9 thousand workers at the US bases ended up on unpaid leave and joint exercises were canceled due to the virus. After medical cooperation against COVID-19, is the cost agreement closer?
An interim agreement may be possible but it is unlikely that South Korea will agree to a cost sharing dollar amount for the long term that will satisfy the Trump Administration’s expectations. This is not an issue that will go away, and future Korean and US presidents will continually have to deal with this issue.
Relations with China are also experiencing fluctuating phases. In 2017 there was controversy over the THAAD system deployed in South Korea, but Beijing is the main South Korean trade partner and remains fundamental for Seoul in resolving the Korean issue. Moon has been highly criticized for sending medical aid to deal with COVID-19 in Wuhan so much so that a petition for impeachment has been put online. How much did Moon’s handling of relations between Seoul and Beijing weigh (and whether positively or not)?
In the weeks before the election, voters were focused more on how the Moon administration managed the virus situation within South Korea. Whether or not Moon was too nice to China was not a key issue on polling day, even if some voters were unhappy that South Korea provided aid to China earlier during the outbreak.
How will relations between South Korea and China develop? Why?
This is not only a bilateral issue. Rather, it is multilateral, whether viewed as a China – North Korea – South Korea issue, or, as a China – South Korea – US issue. A volatile North Korea that faces food security and now health security risks is a situation that both China and South Korea want to manage, and in order to do so the typical South Korean approach is to be friendly to China rather than antagonize China. On the other hand, in the coming months and especially if Trump is re-elected, South Korea will face enormous pressure from the United States on China issues. This will include US regulations that prohibit the export of US technology products that are then incorporated into products sold to Chinese customers, efforts to jointly fight intellectual property theft by Chinese companies, individuals and government agencies, and enforcement of sanctions against North Korea against Chinese sanctions violators. The South Korean corporate world, to protect its investments in China (even if manufacturing is relocated out of China, there is still the enormous domestic Chinese market to consider) will also pressure the Moon administration to avoid antagonizing China. Given Moon’s instincts to view US intentions with suspicion, he will try to be everyone’s friend – China, North Korea, and the US. It is unlikely he can succeed at this though, and will have to pick a side on some issues.
Last year, a real trade war broke out between South Korea and Japan which also caused a suspension of intelligence information sharing. Seoul and Tokyo have joined the alliance with the US, the North Korean and Chinese threat, but also very historically divides them. How much has Moon’s management of relations between Seoul and Tokyo weighed and how (positively or not)?
South Korean voters appear to have affirmed Moon’s tough policies towards Japan. Again, this is a contract with former presidents Lee and Park. Korea is a homogenous society and antagonism towards Japan over the brutal colonization of Korea between 1910 and 1945 can unify most voters. Even the defectors from North Korea who are now in the National Assembly are likely to agree with Moon on these policies towards Japan.
How will relations between South Korea and Japan evolve? Why?
The likelihood is high that relations will remain poor. Moon’s views towards Japan, and Abe’s views towards what is necessary (or unnecessary) to address with regard to Japan’s past actions, are firm and not going to change. Both Moon and Abe have large parliamentary majorities to support their polcies. With Moon and Abe each separately seeking better relations with China, but also trying to manage their relations with the US, there is little space for multilateral unity. Potential events that can change this are if North Korea engages in provocative actions and this forces greater Japan – South Korea – US cooperation, similar to 2017. It also seems unlikely that Covid-19 will be a basis for better relations, as up to now, the countries have managed the situations very differently and without much bilateral coordination.
Due to the pandemic and other political and economic reasons, are historic anti-Chinese and anti-Japanese sentiments resuming in South Korea? Why? And did they play a role in these elections?
Anti-Chinese and anti-Japanese sentiments were already building in South Korea prior to the election. Moon’s election success was based on an unattractive alternative and positive voter response towards Moon administration’s management of the virus situation. Now that the election is over, and once the virus situation improves, we can better assess where bilateral relations are whether with China or with Japan. For example, will Chinese and Japanese tourists be welcomed in South Korea again? Will South Korean companies enjoy access to China and Japan? Will Moon meet Xi or Abe and if so, what will be the result of such meetings? There is certainly much risk that these relations will deterioriate.
Last year there was tension in the South Korean skies between Seoul and Moscow planes. Has Moon management of relations with Russia been appreciated?
These incidents were unusual and the South Korean public, government and military might have been caught “off guard”. From Russia’s perspective it was a brilliant move to demonstrate to China, Japan, North Korea and South Korea that they all must treat Russia as a Pacific power. However, by the time the National Assembly election occurred, this was not on voters minds.
How will relations between Seoul and Moscow evolve? Why?
Moon probably hopes that they do not evolve; that is, the best outcome for Moon is that Russia not try to demonstrate its power in the Pacific. The reality is going to be different. Russia remains a key supporter for North Korea, Russia and China cooperate on many issues, and to the extent Russia (which has sovereignty disputes with Japan) can continue to pressure South Korea to view Japan with suspicion, Russia gains from two US allies who are bickering. Again, the US is also an important factor. It’s clear what US expectations for South Korea are with regard to China, but it is less clear how the US views South Korea’s relations with Russia and what if any expectations the US has.
At the ASEAN level, which met two days ago by videoconference, was it possible to create coordination between the various countries against the health and economic emergency triggered by Covid-19?
South Korea generally has positive relations with Asean members. The “South Korea brand” is viewed favorably in Asean just as it is in most places world wide. South Korean culture such as K-pop and TV programs are popular. In the more developed countries it is an investor or trade partner, and in the less developed countries an aid provider. Unlike Japan with its history of colonization, and China which lately has hurt its reputation among the Southeast Asian public (even if governments are more restrained in criticisms), South Korea can be an ideal partner to assist on Covid-19, especially as its own efforts to manage the situation domestically have generally succeeded. This is a great opportunity for South Korea to exert soft power in Asean.
The duel between former Prime Minister Lee Nak-yon, a 67-year-old Democratic Party representative against Hwang Kyo-Ahn (UPP) in the fundamental ‘constituency 1’ of Jongno, a Seoul. The first prevailed and second, however, resigned. Since the presidential candidates are lined up in ‘district 1’, what do these parliamentary elections tell us about the 2022 presidential election? Could Lee be Moon’s successor?
Former prime minister Lee Nak-yon easily defeated former prime minister Hwang Kyo-Ahn. This is not a surprise given that Lee served under Moon, while Hwang served under the impeached and removed Park. It is too soon to speculate on who will be Moon’s successor. However, the recent presidents have had a slight more powerful and prominent background than only serving in the National Assembly and/or having served as a prime minister. Moon was a prominent aide to former president Roh and ran for president in 2012, former President Park was the daughter of a president, former president Lee was a prominent business leader and mayor of Seoul, Roh was well known as an activist against the dictatorship in the 1990s, and former presidents Kim Dae-jung and Kim Yong-sam had also been prominent leaders of the democratization movement.
What does this election (the first in the world in times of COVID-19) teach us about how democracy (although it is different from the Western model) reacts to an emergency?
This was the largest election during the virus situation though elections involving smaller numbers of voters occurred in Israel and in US states as part of presidential primaries. Unfortunately, because voting systems differ so dramatically (including whether or not vote by mail, or early voting, are available), the lessons from South Korea are limited. It is also too early to tell whether or not any infections occurred as a result of persons participating in election activities or voting, even though South Korea implemented the necessary precautions. Perhaps the most important lessons is that the public and voters have confidence in their politicians regardless of party, but certainly in the incumbent government. When the public has this confidence, they will adhere to the recommended virus prevention measures and avoid irresponsible behavior that might prolong the situation. For now, South Korea appears to be an example of a country where the public has confidence in its government.
Could the pandemic accelerate a change in regional balances?
Seoul will continue to remain the center of politics, business and culture. However, South Korea has had enormous success in recent years in getting foreign tourists to visit other parts of South Korea. If this is sustained it will help foreigners develop a broader understanding of the country and its culture, while also providing a confidence boost to regions that in the past were less well known than Seoul.
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