South Korea Leader Uses New Popularity to Push Sweeping Agenda
South Korea Leader Uses New Popularity to Push Sweeping Agenda
(Bloomberg) -- As South Korea seats a new parliament, President Moon Jae-in’s progressive camp plans to spend the political capital it gained by swiftly tamping down Covid-19 to reshape the country’s virus-battered economy.
Moon’s ruling party won a solid majority in elections in April, riding a wave of public support for its management of the public health crisis. The president and his left-leaning camp will now try for a new push on policies aimed at reducing income inequality and reforming chaebol conglomerates, after previous attempts have faltered.
The parliament sits for four years and will help define Moon’s legacy. It will also become a testing ground for potential successors looking to run for South Korea’s top office when his single term ends in two years. As the session starts Saturday, here are five items to watch:
1. Power Play
Moon’s former prime minister, Lee Nak-yon, emerged from the April election as the person the public favors as South Korea’s next president. Lee is looking to take over as leader of the ruling Democratic Party, and the local JoongAng Daily reported that he’s planning to set up a policy think tank that could help him in a run for president in 2022. While the election landslide gave Moon a freer hand to push policy leftward, he will need the help of Lee -- considered more of a moderate -- to enact legislation that could help determine his legacy.
2. Moon’s “New Deal”
One part of Moon’s legacy will be how well he can implement what he’s called a Korean version of the “New Deal” to create jobs on the back of investments in digital infrastructure. In a May speech, Moon made this a top priority -- and the size and scope of the plan could indicate whether it will be a driver of employment after his government ends.
3. North Korea
Moon has made rapprochement with North Korea a key policy objective, but he’s had little to show for his plans to resume projects frozen by political rancor or shut down by international sanctions punishing Pyongyang for its nuclear provocations. The Democratic Party plans to push two bills that could help restore some contact between the two Koreas, Choi Ji-eun, a spokeswoman the Democratic Party said this week. One of the measures would simplify the reporting process for South Koreans wishing to contact North Koreans, and the other would designate border areas as special zones for inter-Korean reunification and to promote economic exchanges.
4. Chaebol and Real Estate Reform
Like many presidents before him, Moon has tried and failed to add greater transparency to the family conglomerates, known as chaebols, that hold enormous sway over the South Korean economy. While his party is looking to increase penalties for antitrust practices to punish conglomerates seeking to thwart competition, Moon needs to walk a fine line, as the firms supply the exports that keep the economy moving -- and would be key to implementing his “New Deal.”
Moon’s administration has also launched a raft of property-related measures since taking office in 2017, with little to show for its efforts. Moon has tried to cool speculation that has driven up housing prices in some areas by make it more expensive for people to own more than one residence.
5. Term Limits
Moon in April fell short of the necessary two-thirds majority in parliament needed to enact more significant changes requiring constitutional amendments -- such as allowing future presidents to serve more than one term. South Korea’s single-term limit was installed as a safeguard after decades of authoritarian rule, but has been criticized for effectively turning the president into a lame duck soon after taking office. If he can find support, the new term limits would be applicable to the next person who becomes president.
Moon will need help from his conservative opposition to change the current single five-year term to a period of four years, with the possibility of re-election for another four.
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