KOREA CHAIR EXPLAINS • 16/04/2020
By Ramon Pacheco Pardo
16.04.2020
South Korea held its quadrennial National Assembly election on Wednesday. The full 300 seats were up for grabs. Widely seen as a referendum on Moon Jae-in’s presidency as he is about to enter the final two years of his non-renewable five year mandate, the results put him and his party in a strong position to move their agenda forward. The ruling Democratic Party of Korea, Moon’s party, and its satellite party won 180 seats. This allows the ruling party to fast track legislation. No party has ever won so many seats before. The main opposition party, United Future Party, and its satellite party won 103 seats. This means that the liberal bloc, including the Democratic Party, its satellite party and smaller parties, will enjoy a comfortable majority for the next four years.
What are the key domestic implications of the election?
The Democratic Party’s domestic agenda will focus on post-COVID-19 economic reconstruction in the short-term. South Korea has handled well the pandemic by international standards. Indeed, Moon government’s handling arguably was the main reason behind his party’s big electoral victory. But the economy is going to be badly hit, in line with the rest of the world. The government had already passed a 11.7 trillion won (US$9.8 billion) extra budget. New multi-US$ billion packages to support the job market, SMEs, the healthcare sector and other sectors of the economy will follow in the coming weeks and months. Job creation is likely to be a particular target, especially since South Korea has one of the lowest shares of public sector employment across the OECD. Crucially, stimulus has the support of the United Future Party, which before the election called for an even bigger package.
Once the worst of the crisis is over, the Moon government is likely to press ahead with two of its signature policies: minimum wage increases and welfare system strengthening. Seoul implemented two double-digit minimum wage increases in 2018 and 2019. They are said to have decelerated job creation. But they have made South Korea one of the countries in the world with a higher minimum wage as a percentage of the average wage, per OECD data. More modest increases are likely to follow. Meanwhile, the Moon government has increased welfare provisions in areas such as child care or health care for the elderly. An expansion of the welfare system is very likely.
What are the key foreign policy implications of the election?
North Korea was a secondary issue during the run-up to the election. It tends not to be a key factor in South Korean elections, but this time not even its barrage of missile tests the day before the election seems to have had an effect on the vote. Having said that, Moon is likely to seek to press ahead with his pro-engagement policy. His government will not break the UN sanctions regime on North Korea. But it will look at all possibilities to improve inter-Korean relations and create a more peaceful environment in the Korean Peninsula. Thus, it is likely that the Moon government will revive plans to boost South Korean tourism to the North, shelved due to COVID-19. It is also likely that the government will continue to press for the reopening of the Kaesong Industrial Complex and possibly to reconnect inter-Korean rail and road links. In any case, there is a general belief that relations with North Korea will not move significantly until after November’s US presidential election.
When it comes to relations with the United States, Seoul is very likely to press for wartime OPCON transfer. In short, South Korea having operational control of its armed forces in case of war; currently, the United States has wartime operational control. Moon promised to achieve OPCON transfer by the end of his mandate, in 2022. However, this has been an agenda topic for decades. Some reason to postpone transfer has always popped up. The Democratic Party considers OPCON transfer a necessary step to restore full South Korean sovereignty. Seoul and Washington have agreed a three-phase process leading to OPCON transfer. Expect the Moon government to continue to increase the military budget, including purchases of high-tech US equipment, and to ask for the resumption of joint military exercises to argue that transfer should be finalised over the next two years.
