Sejong Digest 2.0 - Issue 12 (April 23 - May 13, 2017)

Results from the South Korean Presidential Election

Benjamin Lee

On May 9, Moon Jae-in was elected as the 19th President of South Korea. He won 41% of all votes, followed by Hong Jun-pyo, the conservative candidate who won 24%. This marked the biggest winning margin in South Korea's Presidential election history. The 77% voter turnout was the highest in the last twenty years, reflecting a strong political participation in the wake of President Park’s impeachment. Moon’s inauguration marks the third liberal presidency in South Korea after Kim Dae-jung in 1997 and Roh Moo-hyun in 2002.

The conservative Liberty Korea Party candidate Hong won second place and exceeded expectations. Despite his past record as an accomplice in an attempted rape incident in college, Hong withstood the controversy and established himself as a strong, conservative candidate and garnered support from mainstream conservatives.

The People's Party candidate Ahn Cheol-soo came in a disappointing third. Ahn's lukewarm support of 21% was a surprise since he had once competed with the leading contender Moon head-to-head in several polls before the election. Ahn, in a last-minute move, also resigned his seat from the National Assembly in an apparent show of commitment to the presidential race. As a result, Ahn now holds no political office and has limited influence within his own party.

Bareun Party candidate Yoo Seung-min came in fourth with 7% of support. Despite his stellar debate performance, Yoo struggled to offer a new brand of conservatism and keep the newly established Bareun Party intact. One week before the election, thirteen National Assembly members left the Bareun party to join the Liberty Korea Party due to Yoo’s weak poll numbers. Yoo's imminent task now appears to be consolidating the Bareun Party and gaining more support from young voters.

The only female candidate on the ballot, Shim Sang-jung from the Justice Party, came in fifth place with 6% of votes. Like Yoo, Shim performed well during the televised debates, but her performance had little effect on voters. Nonetheless, Shim's presence in the presidential election promoted the brand of the Justice party and set important discourses on labor issues throughout the race.

Although Moon won in a decisive victory, he is expected to face serious challenges in pushing reform measures in a divided National Assembly. The ruling Minjoo party has 120 seats in the National Assembly, the largest number of seats among all parties, but this figure remains far short of 150 seats that are required to pass a bill. This means that Moon will need to cooperate with the opposition parties and their leaders who ran against him in this presidential election cycle.

What Moon Jae-in’s Election Means in Dealing with North Korea

Andrew Jung

Moon Jae-in’s victory in the South Korean presidential election signals an imminent change in South Korea’s relations with North Korea with a focus on dialogue and improving inter-Korean relations. President Moon is expected to shift away from the hard-line policies of his conservative predecessors. On the campaign trail, he interpreted North Korea’s recent actions on nuclear tests as a result of “conservative incompetence.” President Moon is expected to pursue a policy similar to the “Sunshine Policy” that former Presidents Roh Moo-hyun and his predecessor, Kim Dae-jung pursued, which emphasized dialogue and diplomacy. Moon was Roh’s chief of staff when Roh tried to ease tensions with North Korea through providing aid and pursuing inter-Korean economic projects.

While President Moon criticized the North Korean regime, he said South Korea needs to view North Korean leader Kim Jong-un as a partner to achieve future peace and reunification. Moon, as a candidate, stated that he believes in promoting economic cooperation between North Korea and South Korea to help reduce both tensions and economic costs of potential reunification. The South Korea’s Ministry of Land, Infrastructure and Transport (MOLIT) was exploring avenues of economic cooperation before the election, in light of the possibility of a policy change towards North Korea. On May 2, 2017, MOLIT put out a notice for companies to bid on potential infrastructure projects in North Korea involving the mining sector.

Moon has also emphasized the importance of the U.S.-South Korea alliance in cooperating on North Korea’s nuclear weapons but said that South Korea needs to take the initiative in inter-Korean dialogue. In an interview with the Washington Post on May 2, he assured that he will pursue talks with North Korea only if preconditions are met and after consultation with both the U.S. and Japan. He stated that he will first meet with U.S. President Trump to agree on measures to end North Korea’s nuclear weapons. He also agreed with President Trump’s belief in applying both sanctions and pressure to persuade North Korea to negotiate (Read the full interview here).

Many policy analysts agree that President Moon will not immediately pursue talks with North Korea. Kim Hong-guk, a professor at South Korea's Kyonggi University argues that President Moon will not pursue talks before discussing with President Trump. Moon would only call for an inter-Korean summit after creating favorable conditions open to dialogue such as discussing the reopening of the Kaesong Industrial complex, a joint North-South economic project. Others say that President Moon’s revival of the Sunshine Policy, which may entail reopening of Kaesong, could strengthen Kim Jong-Un and reduce China’s economic leverage. MOLIT’s project proposals on North Korea could be an example where China’s economic pressure could be undermined. Sue Mi Terry, managing director for Korea of BowerGroupAsia said that the reopening of Kaesong Industrial complex could weaken economic sanctions against North Korea and create difficulties in U.S-South Korea relations in dealing with North Korea. considering the Trump’s administration’s hawkish approach towards North Korea. Interestingly, MOLIT’s proposals can be seen as violating current U.N. sanctions, if implemented. The U.N.’s new sanctions ban collaborating in coal, copper, zinc, and gold industries, which the South Korean firms targeted in MOLIT’s notice may fall under. This can be one scenario that the Moon administration will have to carefully navigate.

The New President and Implications for U.S.-Korea Alliance

Leon Whyte

South Korea’s newly elected president, Moon Jae-in, and the United States’ president, Donald Trump, will be the two key actors in maintaining and strengthening the U.S.-South Korea alliance at a time of increased tension with North Korea and concerns of alliance burden sharing. The two president’s relationships started with a phone call pledging a stronger alliance and an accepted invitation for Moon to travel to the United States.

Despite this auspicious start, President Moon and President Trump have expressed fundamentally different approaches to dealing with the North Korean threat. President Trump has adopted a more hawkish posture towards North Korea than his predecessors His administration has repeatedly stated that “all options are on the table,” including  financial pressure through sanctions, as well as military measures. Moon is well known for favoring a more conciliatory policy approach towards North Korea, both from his campaign trail and his time as the chief-of-staff for former-president Roh Moo-hyun.

The most immediate source of tension between the two allies is the placement of the U.S. THAAD ballistic missile defense system in South Korea. The U.S.-owned and -operated system  is within range to intercept North Korean ballistic missiles but also close enough to potentially target Chinese missiles as well. China has loudly protested the placement of THAAD in South Korea, using government levers to hamper South Korean business activity in China. Moon has pledged to review the previous government’s placement of THAAD in South Korea. Further complicating the sensitive issue is Trump’s claim that South Korea should pay the billion-dollar price tag for the system, despite previous U.S. agreements otherwise.

Another important issue that will affect the future of the alliance is Moon’s desire to engage with North Korea. Moon has established a plan to increase the economic integration between North and South Korea, including re-establishing the joint North and South Korean industrial facility in Kaesong as well as other economic ventures. However, most of the proposed economic activity is banned under U.N. Security Council sanctions, and would directly contradict U.S. efforts to increase financial pressure against North Korea.

Despite these potential flashpoints, the U.S.-South Korea relationship has been bound in blood since the 1950 Korean War and has withstood numerous tests and periods of distrust throughout the decades. It is possible that President Moon and President Trump strengthen their alliance.

New Dynamics in Korea-Japan Relations

Jessie Chen

The newly-elected South Korean President Moon Jae-in spoke directly with Japanese Prime Minister Shinzo Abe over the phone on his second day in office. In addition to exchanging cordial remarks, typical of the first post-election phone call, President Moon expressed his stance on the thorny “comfort women” issue, stating that “the reality is that the majority of the [South Korean] people cannot accept the comfort women agreement.”

Japan government has urged South Korea to comply with comfort women agreement reached in 2015, whereby Japan allocated $8.9 million USD to a fund to help former comfort women and their families. Prime Minister Abe also issued an official apology to those who were forced into sexual slavery. Yet, during the campaign, Moon called on the comfort women agreement should be entirely renegotiated.


However, he made clear that the issue should not affect the U.S.-Japan relationship at large. He emphasized that the two countries should work independently to address that both nations are now facing the nuclear and missiles threats from North Korea and should improve security and economic ties to ensure regional peace and prosperity.

President Moon’s approach to North Korea may also cause divergent with Japan. Moon as a presidential candidate had expressed that he would also examine the terms of the General Security of Military Information Agreement (GSOMIA)  that was re-negotiated by former President Park Geun-hye before her impeachment in 2016. Unlike President Park, Moon would adopt a moderate approach to North Korea, called “Sunshine policy,” aiming to ease Korean peninsula tensions via six-party talks.

The New President and Implications for the South Korean Economy

Grace Chung

On Tuesday, May 11th, South Korean voters delivered a landslide victory to liberal politician Moon Jae-in, promising that he will put the South Korean economy and its democracy back on track.

According to the World Bank, the South Korean economy has slowed down, its economic growth rate hovering below 3% since 2011. A key issue in the presidential election was how the new administration should respond to the country’s economic slowdown. Moon’s promises on the campaign trail regarding reviving the economy mainly focused on “chang[ing] the economic growth structure to one that focuses on the people [and] invest[ing] in the people.” He pledged to creating 810,000 jobs in the public sector, increasing fiscal spending, working on chaebol or conglomerate reform, and bringing information technology (IT) and data science into the economy.

According to Statistics Korea, South Korea’s unemployment rate hit 4.2% as of April 2017 and youth unemployment rate (for ages 15-29) of 11.2 percent. His proposed solution to the country’s unemployment problem was to create job opportunities, especially in the public sector, meaning creating more civil servant, police officer, firefighter, social worker positions. Focused on the wealth redistribution, he also suggested that he would narrow the compensation gap between full-time employees and part-time employees or contractors.

Moon’s other workplace-related policies included increasing minimum wage to 10,000 won (US$8.88) from 6,470 won (US$5.74) and cutting working hours to 1,800 hours from 2,113 hours. South Korea’s annual inflation rate has been at near 5-year high and minimum wage makes up 38% of national mean wage. In light of South Korea’s notorious reputation for not having a good work-life balance, Moon also called for cutting working hours to bring closer to that of the global average. Moreover, President Moon promised that he would implement fiscal stimulus measures to further address unemployment and lagging economic growth.

Following the former president Park Geun-hye’s impeachment, President Moon also highlighted that reforming chaebols, family-run conglomerates, is a priority. He promised that he would increase regulations and even consider breaking up the chaebols. He called for increasing transparency in their corporate governance and preventing unfair practices such as insider trading and predatory pricing. To carry out the plan, he said he will form “Euljiro Committee,” referring to the government entities, the prosecutor’s office, and the police all located at Euljiro, to monitor and punish chaebols’ misbehavior. He also promised that he will increase the corporate taxes on major conglomerates from 22% to 25%, expecting to raise additional 4.6 trillion won (US$4.1billion) in yearly revenues, and increasing income taxes on individuals earning more than 300 million won (US$266,000) from 40% to 42%, generating 1.2 trillion won (US$1billion).

Some critics and economists argue that the new president needs to create and implement a best policy mix to pull the economy out of the low-growth rut. They note that Moon’s redistributive policies and pledges to reform large conglomerates must be balanced out by efforts to forge a more business-friendly environment.

Lastly, one of Moon’s major economic proposals was to strengthen the information and communication technology sector as South Korea falls behind to keep up with growing IT industry in major emerging economies. Following other governments’ initiatives to boost the IT sector, as is the example of the European Union (EU), Moon promised to promote a data-driven economy. President Moon emphasized that building a “digital economy” will be the “decisive determinant” of South Korea’s competitiveness on the global stage.

This Week in History: Mother’s Day and Parents’ Day in Korea

On May 8, 1956, the South Korean National Assembly established Mother’s Day. Although the origin of Mother’s Day in South Korea is unclear, some historians argue that the establishment of Mother’s Day has to do with widespread American influence at the time. An example of American influence is most salient when it comes to the tradition of giving red or pink carnations on Mother’s Day. Historians trace this tradition back to Anna Jarvis, founder of Mother’s Day in the U.S., who gave carnations to her mother because her mother liked them so much. But strangely enough, South Korea did not establish a separate Father’s Day like the U.S. Instead of establishing an official Father’s Day, the National Assembly renamed Mother’s Day into Parents’ Day in 1973. Every May 8th in South Korea, children express their love and appreciation for parents with gifts and carnations.