The BGA Korea Team, led by Managing Director B.J. Kim, wrote an update on the April 10 general election.

Context

  • Korean President Yoon Suk-yeol narrowly escaped the worst-case scenario of a potential opposition-controlled legislature initiating his impeachment after a landslide parliamentary election victory by the Democratic Party (DPK) coalition on April 10. While the DPK increased its majority, it fell short of the 200 seats needed to override presidential vetoes and impeach the president. Yoon must now struggle with the prospect of becoming a lame duck for his remaining three years.

  • In the 300-member National Assembly, Yoon’s conservative People Power Party (PPP) secured only 108 seats after the April 10 general election, down from 114 seats it held previously. The main opposition progressive DPK, under the leadership of Lee Jae-myung, who ran against Yoon in the 2022 presidential race, further strengthened its majority control of the legislature, winning 175 seats, up from the 156 it previously held.

Significance

  • The deregulations and tax cuts that Yoon talked about will not come. The executive government will continue its efforts for lower-level deregulations. However, deregulations with bigger impact requiring legislative actions may be blocked, unless DPK members are sufficiently persuaded. Especially, the DPK and its progressive allies will resent ideas of tax cuts related to big corporations, financial gains and inheritance.
  • Support for key industries will continue with some nuance. During its latest campaign, Yoon’s conservative PPP and the DPK identified key industries deserving further government support:
    • Bipartisan support goes to semiconductors and displays, artificial intelligence, intelligent robots, hydrogen, rechargeable batteries, future mobility and cutting-edge bio.
    • To that, the DPK adds support for renewable energy, which the Yoon government considers important but did not include in its 12 National Strategic Technologies list.
    • The PPP’s 12 National Strategic Technologies list includes next-generation nuclear power, telecommunications, aerospace and marine transportation, cyber-security and quantum physics and computing.
  • Yoon’s emphasis on strengthening ties with Washington and Tokyo will not change. Unlike some international media outlets such as the Wall Street Journal speculated, BGA does not see any reason for Yoon’s foreign policy direction to be affected by the election. As many experts acknowledge, the National Assembly has limited power over Korea’s diplomacy. Furthermore, most voters respond positively to Yoon’s efforts to upgrade cooperation with the United States and Japan. Yoon will continue to strengthen this political asset.
    • The DPK, on the other hand, will likely have little interest in pressing on with its pro-China reputation highlighted by Lee’s seemingly pro-China comment during the campaign, which was seen as his political liability.

Implications

  • The election results showed once again that, in Korea, it is the people who are in charge, neither allowing the president to be complacent, overpowering Parliament with a legislative majority or granting the opposition the power to drive out the incumbent government. Multinational businesses should be reminded that the remaining three years of the Yoon presidency will require the government to demonstrate ever greater sensitivity to the public mood. Public understanding and reaction will greatly affect the way the government handles many issues that global enterprises care about in Korea.
  • For international businesses, the election outcome will not have immediate negative impacts. The progressive DPK with its strengthened grip over the legislature is unlikely to take overt actions negatively affecting global businesses operating in Korea. While previously serving as governor of Gyeonggi province — Korea’s largest local government with more residents than the city of Seoul — Lee hosted many of the world’s leading businesses. He built a reputation for his forthcoming stance and support for international enterprises.

If you have any questions or comments, please contact BGA Korea Managing Director B.J. Kim at bjkim@bowergroupasia.com.

Best regards, BGA Korea Team

A small ginko leaf

Managing Director

B.J. supports BGA clients on the ground in Korea, advising them on stakeholder engagement and larger government affairs and public policy matters in Seoul. A former Korean diplomat, B.J. has advised international firms on political-economic and policy-regulatory affairs since 2003, offering monitoring and analytical services on legislative, regulatory and political issues. He also has offered companies hands-on support in their engagement in Korea. Prior to his career in consulting, B.J. was a diplomat serving two of Korea’s trade ministers as policy counselor and special assistant, developing international economic policies and public communications strategies on export and investment promotion. He has ... Read More