Korea: Parliamentary election results herald major change in Korea's politics
April 25, 2016
Contrary to most expectations, the results of the 13 April parliamentary election showed that the ruling conservative Saenuri Party of President Park Geun-hye failed to secure a majority in the 300-seat National Assembly, which it had controlled since 2012. Instead, Korean voters favored the liberal Minjoo Party of Korea and the center-left People’s Party (PP), which saw unprecedented support. The election has created a major upheaval in the Republic, as it has led to a hung parliament for the first time since 2000 and a three-party system for first time since 1996. Substantial changes in political dynamics are expected since the Saenuri-led government is now required to cooperate with a liberal majority in Parliament. The first victim of the shockwave was Saenuri’s chairman, Kim Moo-sung, who resigned right after the National Election Commission (NEC) released the official results. President Park Geun-hye’s successor will be elected toward the end of 2017 and Moo-sung’s presidential ambitions are now severely dented.
With a turnout of nearly 60%—four percentage points higher than the 2012 elections—official results showed that the Saenuri Party obtained 122 seats, which represented a massive 35-seat loss over the previous legislature. The Minjoo Party gained 123 seats, which resulted only in a marginal loss of 4 seats compared to the previous legislature, while the PP—which participated for the first time in a parliamentary election—obtained 38 seats and the far-left Justice Party got 6, providing progressive parties a combined 167 seats in the 20th National Assembly.
Swift changes in Korea’s political landscape are hardly unusual and Saenuri’s defeat has several roots. President Park’s lack of concrete achievements on any front, successive disasters such as the Middle East respiratory syndrome (MERS) outbreak, as well as a string of disappointing personnel appointments likely exacerbated dissatisfaction among the Korean electorate. On the economic front, stewardship has been disappointing. A rapid succession of policy initiatives, namely economic democracy, deregulation and a recent labor reform, have failed to jumpstart GDP growth, which dropped to 2.6% in 2015 (2014: +3.3%) and it is expected to remain subdued this year. Youth unemployment remains at a multi-year high, as few jobs exist for a glut of new graduates each year. Meanwhile, and not less important, household debt reached about USD 1.0 trillion at the end of 2015, which will continue to put the brakes on private consumption and domestic demand. Regarding foreign policy, President Park’s hardline stance on North Korea did not inspire an electorate that seems unperturbed by Kim Jong-un’s bellicose antics.
In the past, even as minority, the opposition could block or delay part of the government’s initiatives. However, the Saenuri Party managed to avoid prolonged deadlocks in the legislative process. Now, as a majority, the opposition will continue doing so all the more and Saenuri’s new position in the Parliament will force it and the president to change their approach. This, in turn, will only accelerate Park Geun-hye’s presidency’s fall into a role as a lame duck, which is the fate of every Korean president despite achievements and overall performance. It remains to be seen if internal turmoil will arise within the ruling Saenuri Party in the remainder of President Park’s administration, since the results of the election fractured the party vehemently. Meanwhile, the new liberal front—now flushed with unexpected success—could face similar problems, since disunity and fractures persist. Although the Minjoo Party alone can block Saenuri’s legislation, the PP’s boasted centrism could prompt a surprising accord with Saenuri, so that the latter would regain its majority, albeit at a high price.
Author: Ricardo Aceves, Senior Economist