Growth Takes Back Seat to Social Justice as Korea Election Nears
(Bloomberg) -- South Korean presidential candidates used to promise voters strong growth. Not this time.
Moon Jae-in, a slight front-runner in the May 9 vote, says his priority is increasing spending to create jobs in the public sector. Centrist Ahn Cheol-soo is differentiating himself from the left-leaning Moon by stressing a tougher stance on North Korea and calling for stronger military ties with the U.S. as tensions on the Korean peninsula rise.
The shift in focus from past races, when candidates set lofty growth targets, follows a blockbuster political scandal that in recent months has landed the previous president and an heir to the Samsung group in jail. Moon and Ahn are calling for an overhaul of the economic and political system that gave rise to the upheaval and contributed to youth unemployment, weak income growth and rising inequality.
“Koreans have become more interested in making a just society,” said Ha Joon-kyung, a professor of economics at Hanyang University in Gyeonggi province. “Previous administrations targeting specific growth have all failed, and the public sentiment is that the growth that was achieved hasn’t improved ordinary peoples’ livelihoods.”
Perceptions of regular workers being left behind while political and corporate elites prosper aren’t confined to South Korea. Similar complaints fed into the U.K.’s decision to the leave European Union and Donald’s Trump’s victory in the U.S., and are now on show in France and Germany as elections loom.
Previous presidents have been criticized for failing to meet the ambitious growth they promised on the campaign trail, as a weaker global expansion and structural challenges such as demographics curbed output over time. Former President Park Geun-hye aimed at 4 percent growth during her term. Predecessors Lee Myung-bak and Roh Moo-hyun both pledged 7 percent expansion.
The only candidate in the current race to name a growth target is Hong Joon-pyo, a member of the conservative party running a distant third in the polls.
South Korea’s growth is forecast at 2.6 percent this year, compared with an average 3.5 percent over the past 10 years.
Adding to public discontent is weak income growth and a widening wealth gap. Household income grew only 0.6 percent last year, according to data from the statistics office. Income for the top 20 percent increased 2.1 percent, though, even as that for the bottom 20 percent of households fell 5.6 percent.
“The lower growth rate accompanied with wealth inequality has triggered public anger, making distribution, fairness, and justice more appealing rhetoric for the election," said Kim Jung-sik, a professor of economics at Yonsei University in Seoul.
In a speech earlier this month, Moon said the upcoming election is not a confrontation between conservatives and progressives, but between justice versus injustice and fair versus unfair. Moon and Ahn have both pledged to reform the chaebols, or family-run conglomerates, reining in the families’ influence and limiting expansion of their businesses.
As geopolitical tension rises over North Korea, candidates are scrutinizing their rivals’ stances. In televised debates, Moon had to defend his previous remarks that the next government should be able to review the plan to deploy the U.S.-led missile defense system, a process already under way. Hong, the conservative candidate, vowed strong security, going as far as saying the U.S. should consider deploying tactical nuclear weapons in South Korea.
The conventional wisdom that conservative candidates will focus on pro-growth policies rather than welfare payouts also does not hold for this election.
Yoo Seong-min, a member of the smaller conservative Bareun Party who is running fourth in polls, has promised to extend child-care leave to three years and raise child-care benefits, the minimum wage and unemployment benefits.
“Discussion of growth is taking a back seat in the current election because the public thinks growth without fair distribution is meaningless,” said Kim, of Yonsei University. “I find this regrettable as more jobs and fair wealth distribution can only come with growth.”