New majority will
At the domestic level, the biggest immediate challenge for the Moon administration remains the need to deliver on its numerous campaign. The parliamentary elections of 15 April 2020 – dominated by the COVID-19 pandemic – were crucial for President Moon, as winning a parliamentary majority for his party improved his chances of being able to deliver on his agenda, though the pandemic will strain the government’s ability to fulfill key promises regarding reducing social inequality, deepening democracy and curbing real-estate speculation.
New, bolder measures
The initiatives that have been implemented, such as the minimum-wage increase and the increase in real-estate taxes, have thus far failed to make Korea a more just society. For this reason, if he is to achieve his goals, existing initiatives will have to be improved, and new bolder measures will have to be implemented. However, the government has in fact seemed timid in many areas, backtracking quickly when its policy proposals have been criticized. Moreover, it has seemed to count on the success of its North Korea policies, a dangerous tactic given the unpredictable character of the North Korean regime.
Export focus leaves economy vulnerable
Though key macroeconomic indicators in South Korea remained robust as of the end of the review period, the country’s dependence on exports leaves it vulnerable both to global economic volatility and external political conflicts. By the close of the period, several observers had adjusted their forecasts for 2019 growth to 2% or less, which is very low by historical standards in South Korea. The tide of global trade protectionism, the U.S.-China trade war, rising interest rates in the United States and the spreading currency crises in emerging economies all pose serious challenges for the South Korean economy.
Labor market, household debt are key concerns
Domestically, the biggest economic challenges are to enhance social mobility and improve job conditions for non-regular workers and the younger generation. In addition, household debt levels and the continuing speculation in the real-estate market pose major challenges to social cohesion and life satisfaction. As a human-rights lawyer, expanding civil rights and deepening democracy are important goals for President Moon; however, overcoming residues of authoritarian rule such as the National Security Law, persistent discrimination and restrictions on the freedoms of expression and association remains a difficult challenge. For example, it remains to be seen whether Moon will ultimately be able to deliver on his often-repeated promise to ratify the remaining International Labor Organizations (ILO) conventions on the freedom of association and forced labor.
Amid a trend toward a more timid and business-friendly approach, it appears unlikely that Moon will be able to implement bolder policies. Several long-term tasks remain important, including addressing the challenges posed by an aging society, making the transition to a more multicultural society, restructuring the country’s dominant business conglomerates, strengthening small and medium-sized enterprises (SMEs) and improving the current low levels of labor productivity.
North Korea remains
While the threat from North Korea seems to be diminished given the recent improvements in the relationship, the volatile character of leadership in the North – as well as in the United States – offers no guarantee against sudden reversal. Given the lack of regional institutions and the United States’ increasingly unilateral approach, it will not be easy for President Moon to institutionalize the peninsular peace process progress in the form of a peace treaty and other mechanisms able to stand the test of time. North Korea remains a serious military threat; but even beyond this issue, conflicts with the United States over trade relations and military cooperation will remain a burden for the government.
Climate goals will be closely watched
Conflicts with Japan over the recognition of Japanese crimes during the colonial period, as well as over trade-related issues, will most likely persist, as the Japanese government under Prime Minister Abe has shown itself willing to use tensions with South Korea and the threat from North Korea for domestic purposes. As the world’s seventh-largest emitter of greenhouse gasses and an underperformer in the transition to a carbon-neutral society, South Korea will be closely watched when it announces its new climate goals in 2020. As a member of the G-20, Korea may ultimately be asked by its partners to show more leadership in combating world poverty, and in creating a more stable and sustainable global governance system.
Sang-young Rhyu, “Negotiations on Denuclearization in North Korea: Laying Out the Scenarios,” EAF Policy Debates, N0.107 (November 6th, 2018).
Ideological polarization not a serious factor; gridlock between
Party polarization in the sense of political and ideological polarization is not a problem in Korea. On the contrary, the main political parties (the Democrats and the Conservatives) are generally criticized for being too similar, with the exception of a few positions on contentious topics such as policy toward North Korea. Indeed, it has not been uncommon for politicians to shift their allegiances between the country’s main political parties, or even to dissolve parties when this has seemed likely to further their political ambitions. However, the absence of pronounced ideological and political polarization masks a furious struggle for power between factions typically grouped around powerful individuals. Thus, regardless of the degree of party polarization or the trend of converging policies among parties, Korea’s National Assembly has been notorious for political gridlock. Moreover, even though Korea uses a presidential system, the effects of this parliamentary gridlock have been substantial under the Moon government. (Score: 5)