After Yoon: South Korea’s urgent need for political and economic recovery

The growing turmoil in South Korea’s political climate reached a boiling point when, on December 3 2024, then-president Yoon Suk-yeol declared an emergency military takeover. The reasoning was arguably weak – Yoon feared that there was a growing number of North Korean sympathisers, and the need arose, therefore, to “eliminate anti-state elements”. Finally resulting in an impeachment on December 14, South Korea’s future was left murky. The chaos was exacerbated as shortly afterwards, on December 27, then-acting-president Han Duck-soo was also impeached – allegedly for not being sufficiently cooperative during Yoon Suk-yeol’s impeachment.

Regardless of who is voted into power, the winning candidate will undoubtedly be left with a plethora of problems to solve – chiefly, growing income inequality, corruption, and a dwindling birth rate

As it turns out, Yoon’s erratic actions are only one of the several controversies surrounding South Korea’s tumultuous presidential history. In 2017, then-president Park Geun-hye was impeached after it was revealed that she was involved in a major bribery scandal, by way of leaking sensitive and official documents. Amid the vast confusion, emergency snap elections are set to occur on June 3. While there are several candidates, two major candidates stand out: from the ruling People Power Party (PPP), Kim Moon-soo, and from the opposing Democratic Party, Lee Jae-myung. Regardless of who is voted into power, the winning candidate will undoubtedly be left with a plethora of problems to solve – chiefly, growing income inequality, corruption, and a dwindling birth rate. Before addressing the candidates, then, it may be necessary to give a rundown of the economic and political problems South Korea faces at the moment.

Economically, South Korea has made significant strides since its formation in 1948. Formed as a product of war and division, South Korea was economically downtrodden. This arduous period was soon followed by ‘The Miracle on Han River’: where between 1960 and 1997, South Korea saw humongous economic growth, after significant land reforms, five-year plans, and efforts to become a technological hub. As a result, South Korea has largely held a flourishing GDP, which in 2023 amounted to USD 1.71 trillion. Home to major corporations such as Samsung, Hyundai, Kia, and Daewoo, as well as a booming entertainment industry, much of South Korea’s economic success runs on international trade and exports.

Despite the supposed economic success, a major problem presents itself – income inequality. A predictable by-product of relying on family-run conglomerates (also known as ‘chaebol’ in South Korea), these chaebols have a major role in expanding South Korea’s economy. What this has apparently resulted in is the massive prevalence of income inequality, as mid and low-level companies struggle to function amid a nepotistic industrial monopoly.

An editorial opinion titled, ‘Urgent action needed to address wealth inequality’, in Korea identifies this economic divide as a crucial point of action for the future administration, writing: “It is essential for the government and political parties to prioritise the needs of the vulnerable and take decisive action to restore balance and equity in the economy.”

Unfortunately, it appears that these and other factors have contributed to an economic decline in South Korea’s economy in the last quarter of 2024, as Reuters reports. Close to hitting a technical recession, Bank of Korea representatives have expressed their worry, saying: “Economic sentiment weakened significantly on political uncertainty, which will continue to affect the economy as a risk factor in the first quarter and throughout the year.” With this having affected South Korea’s rate of export (which only rose by 0.3% in 2024’s fourth quarter, after having fallen by 0.2% in the third quarter), the economy appears to be in need of recovery.

This brings us to another major issue, which is the depleting birth rate. While an ideal birth rate should be around 2.1 births per woman, in 2023, South Korea’s birth rate was only 0.75 births per woman

In addition to the political uncertainty, there is another major roadblock in South Korea’s economy – US President Donald Trump’s imposition of tariffs. On June 1, Reuters reported a concerning drop in exports by 1.3%. Through this, it can be surmised that South Korea has sadly not recovered from their economic performance in 2024’s Q4. The next South Korean president then, should not only address the necessary recovery of the economy but also present a convincing plan on how to address US tariffs, among other obstacles.

This brings us to another major issue, which is the depleting birth rate. While an ideal birth rate should be around 2.1 births per woman, in 2023, South Korea’s birth rate was only 0.75 births per woman. As per The Guardian, South Korea’s birth rate has stayed below one since 2018, although a major aim is to hit the target of one by 2030. Out of the several possible factors, the most plausible seems to be a cost-of-living crisis as a result of income inequality. In a BBC feature, citing a paper from the Peterson Institute of International Economics (PIIE), writer Jean Mackenzie posits: “Researchers say this proves they [women] are being presented with a trade-off – have a career or have a family. Increasingly, they are choosing a career.”

The truth is undoubtedly concerning – at the moment, South Korea has the lowest birth rate in the world. The South Korean government, including Yoon, have continued to incentivise marriage and childbirth, awarding stipends and childcare subsidies to couples. While the birth rate has slightly risen from 0.72 to 0.75, experts claim that this is not sufficient. The Guardian predicts “The population […] is expected to shrink to 36.22 million by 2072, according to the latest projection by Statistics Korea.” To avoid this prediction from being realised, it is indubitably necessary for the birth rate to rise increasingly, through not just incentivisation but also encouraging the migration of young people. As such, migrants form 5% of South Korea’s population. Through sponsoring international work and providing compelling opportunities, South Korea may benefit from a potential rise in population among a younger age bracket.

This brings us to the impending snap elections on June 3. Among the several highlighted issues – economic depletion, low birth rate, and the need to improve trade relations with the US (among other issues, such as trade with China and problematic relations with North Korea) prove to be the key problems for the future president to address. Lee Jae-myung of the Democratic Party (who had initially run against Yoon in 2022), pledges to “bring to justice anyone involved in Yoon’s failed bid and has also promised to introduce tighter controls on the president’s ability to declare martial law.” Lee appears to take a progressive approach towards the economy, proposing a polarising ‘Basic Income Scheme’, which may help bridge economic gaps across the population, while challenging the wealthier classes. He also promises to smooth relations with the US, saying in an interview with TIME: “It is very important for us to engage in reasonable and rational conversations and come up with a solution that would benefit all.”

Lee’s approach to the birth rate includes introducing newer schemes and incentives to facilitate a rise. Although the apparent frontrunner, Lee does not have a clear record and instead has a problematic history of corruption and bribery. In 2023, for example, a case of corruption was brought to light with regard to a land development scheme. An assassination attempt against Lee transpired as recently as January 2024. While a controversial figure, a poll conducted on May 28 indicates a majority of 49% of voters to be in his favour.

Politically, Kim promises to “structurally” solve the birth rate crisis by tackling factors such as the cost-of-living crisis and the income divide, as opposed to Lee’s incentive-driven approach

Conversely, PPP’s Kim Moon-soo has opted for a centrist approach. Kim has apparently changed his political alliance on multiple occasions, having initially emerged as a progressive figure, and then adopting a far-right approach. It may be in his favour, strategically, to distance himself from far-right views at this moment, which may have resulted in this shift. Al Jazeera reports infighting among PPP’s politicians, informing that attempts have been made to replace Kim Moon-soo with the now-impeached Han Duck-soo.

As per the economy, Kim plans to hold an emergency meeting with Trump, maintaining that “he is the best person to discuss the two countries’ security alliance and response to North Korea and China.” He pledges to ease regulations and allow businesses to easily work with South Korea, in hopes of encouraging investments.

In the end, it appears there is a lot to resolve. While the issues highlighted here have been brimming for several years, Yoon’s attempted insurrection is difficult to undermine. As 12 million early voters (a quarter of the eligible voters) have already cast their votes, it is clear that the population is deeply concerned about their country’s position. It may seem that among this extreme uncertainty, South Korea may benefit from a leader who goes through with their promises and has the country’s best interests at heart.