Pity our next presidentMiracles won’t come to President Park Geun-hye. There has been a common factor in the rulings on sensitive cases by the Constitutional Court whether they were on adultery, death sentences, bans on abortion, moving the capital from Seoul, and the antigraft law dubbed the Kim Young-ran Act. The verdicts ended up respecting popular opinion more than the propensities of individual members of the bench. The latest poll showed that 77 percent of South Koreans wanted the president out. Sorry, madame.
Even if the legislature’s impeachment of the president is struck down by the court, Park would barely be able to do anything during the remainder of her term, which ends next February. South Gyeongsang Governor Hong Joon-pyo outright criticized her, saying the public is stupefied and enraged that the president had to seek advice from a lowlife like Choi Soon-sil. Kim Moo-sung, who led the ruling party before its breakup and is now a member of the splinter conservative Bareun Party, joined the condemnation by saying she has done too many deeds unfitting for a president. He predicted her doom.
Considering public opinion at the moment, the next president will most likely come from the liberal opposition. Moon Jae-in, in his second bid for presidency, cannot be happier. He owes it all to Park for demoralizing the conservative camp beyond repair. None of the candidates in the conservative camp command a double digit approval rating. The main opposition Democratic Party is out to dominate both conservative and liberal voters. Seongnam Mayor Lee Jae-myung is even more liberal than the leftist Justice Party, and South Chungcheon Governor An Hee-jung threatens to steal votes from the conservative People’s Party and Bareun Party. The race cannot be any better for Moon.
No matter how easy the campaign might be, the next presidency won’t be a walk in the park. As soon as the president takes office, he will be challenged with demands to renegotiate the U.S. free trade pact. President Donald Trump has been justifying renegotiations with data showing U.S. exports decreased $1.2 billion while Korean shipments to the U.S. increased by $13 billion. Past comments may haunt Moon. In 2012, he said the FTA needed to be renegotiated to fix unfavorable terms for Korea. In fact, Korea could lose more than its gains in the renegotiations.
Then there are security issues. Liberal President Roh Moo-hyun wanted greater defense sovereignty by assuming wartime command of Korean forces from the U.S. The surrender of U.S. wartime command could lead to the dismantlement of the Korea-U.S Combined Forces Command and a scaling down of U.S. forces in South Korea. The elections have seen cool judgment and reasoning from the two traditional allies get thrown out the window. Trump demands Seoul double its defense spending to 4.3 percent of gross domestic product from the current 2.4 percent share for greater cost-sharing. If Seoul asks for wartime command, Trump could say, “By all means.”
Considering his impulsive nature, Trump could order U.S. troops to pack up at the slightest slight from a liberal South Korean president.
Foreign policy is not the only headache for the next president. The economy is slowing fast. Koreans aged 25 to 29 total 630,000. Those between 20 and 24 are 700,000, which means youth unemployment will worsen. Experts at home and abroad warn that the Korean economy must grow at 3 percent over the next 10 years to ensure sustainability. But we hear no restructuring or deregulation proposals from the presidential candidates.
The financial markets are already bracing for another rout as the U.S. Federal Reserve strongly indicated another hike in interest rates next week. It would be the second hike in a year. The Bank of Korea confesses the pace of tightening is faster than it expected. At the current pace, the Fed could raise the benchmark rate three more times, which would make U.S. interest rates higher than the Korean base rate of 1.25 percent by the end of the year.
Bank of Korea Governor Lee Ju-yeol said the central bank would not mechanically respond to the U.S. rate moves. U.S. interest rates were higher than their Korean counterpart from June 1999 to March 2001 and from August 2005 to August 2007. To stop an exodus of foreign capital, the Korean central bank inevitably had to raise its interest rates. The fallout was the bursting of the credit card bubble and subprime mortgage crisis in the U.S.
When interest rates go higher, debt becomes nightmarish. Household debt has swelled to 1,344 trillion won ($1.2 trillion). Over 1.46 million people with low incomes and poor credit histories would be first to suffer. The 3,278 zombie corporations in Korea will fall like dominos. The inflated real estate market could also burst.
The social divide that has been apparent in parallel protest movements in the wake of the presidential impeachment also could weigh heavily on the nation. An appointment of a TV anchor as deputy mayor of Seoul was canceled because liberal civic groups accused him of painting the disgraced president in an overly rosy glow. Multiple leadership challenges await the next president.
JoongAng Ilbo, March 8, Page 31