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Lee Jae-myung's economic leadership

Published: 26 Feb. 2025, 00:01

Ko Jung-ae

The author is the editor-in-chief at the JoongAng Sunday.

Writing about a particular individual in a row, especially one widely seen as the front-runner for the next presidency, is never an easy task. Yet, I feel compelled to do so because of a single, striking image. The photograph itself may seem ordinary, but its context is anything but.

The scene unfolded on Feb. 19 at a shipbuilding and defense industry roundtable hosted by the Korea Defense Industry Association. At the center of the image was Lee Jae-myung, leader of the Democratic Party (DP), flanked by the CEOs of Korea’s top three shipbuilding companies, all raising their fists in solidarity. Someone had likely called for a show of enthusiasm: “Fighting!”

Democratic Party leader Lee Jae-myung, center, poses during a shipbuilding and defense industry roundtable hosted by the Korea Defense Industry Association on Feb. 19. [NATIONAL ASSEMBLY JOINT PRESS CORP.]

During the meeting, Lee referenced former U.S. President Donald Trump’s interest in Korea’s shipbuilding industry, stating, “It is crucial for politics to support the activities of businesses. In international relations, there are many issues that cannot be resolved at the corporate level alone without the involvement of the government and politicians. The DP will identify what we can do to help.” Though this is a reasonable statement, it also carries an underlying unease.

Just a day earlier, a delegation of CEOs from Korea’s 20 largest business groups, organized by the Korea Chamber of Commerce and Industry, had departed for Washington. Their agenda included discussions on shipbuilding cooperation, an area where Korea has significant leverage. Former lawmaker Lee Kwang-jae had framed the issue as a “Korea-U.S. maritime alliance,” explaining:

“Beyond commercial vessels, the United States needs icebreakers for its Arctic routes from Alaska to Greenland. Korea possesses the world-class technology to build eco-friendly icebreakers, icebreaking cargo ships, polar escort vessels and LNG carriers. Moreover, the global naval fleet — including aircraft carriers and destroyers — relies on Korea’s expertise, with leading companies such as Samsung Heavy Industries, Hanwha Ocean and Hyundai Heavy Industries.”

Yet, not a single shipbuilding CEO was present in Washington. Instead, lower-ranking executives attended on their behalf. The industry is divided on why. Some say there were never plans for CEOs to join the delegation, while others speculate that they skipped the U.S. trip to attend Lee Jae-myung’s event instead.

Would their presence in Washington have strengthened the delegation’s influence? One thing is clear: While businesses are making their own efforts to navigate global challenges, the DP’s self-proclaimed role in supporting them seems lacking.

More troubling, however, is what Lee said behind closed doors. Reports indicate that he asked Hanwha Ocean executives if they could withdraw a lawsuit — one seeking 470 billion won (approximately $350 million) in damages over a 51-day illegal occupation of the Okpo Shipyard by subcontracted labor unions in 2022. The protest effectively paralyzed shipyard operations, with the company estimating total losses at 800 billion won. When executives responded that withdrawing the lawsuit could constitute a breach of fiduciary duty, Lee reportedly suggested they “find a way” and assured them of his “full support.” Was this an inquiry, or was it pressure?

The irony deepened when Lee and the DP pushed forward amendments to commercial law that same week. If enacted, these changes would allow minority shareholders to sue executives for decisions deemed detrimental to their interests — a law that would apply directly to Hanwha Ocean’s case. The company now faces a lose-lose scenario: Drop the lawsuit and risk breach of fiduciary duty or proceed with it and risk political retaliation. Which consequence is more daunting?

Democratic Party leader Lee Jae-myung speaks at a press conference held at the headquarters of the Korean Confederation of Trade Unions in Jung District, central Seoul, on Feb. 21. [NEWS1]

Lee’s actions align with his broader political strategy of transactional governance: promising targeted benefits to different voter groups to bridge the 0.73 percentage point margin by which he lost the last presidential election. Yet his true priorities became clear in his Feb. 21 address to the Korean Confederation of Trade Unions (KCTU):

“Just as during the impeachment of Park Geun-hye, and now with the impeachment of President Yoon Suk Yeol, KCTU members played a crucial role. Alongside DP members, I sincerely thank you. You have worked hard, and I will do my utmost to ensure your efforts are not in vain.”

Meanwhile, exemptions to the 52-hour workweek have been scrapped, and controversial legislation — including amendments to commercial law, the Grain Management Act and the Yellow Envelope Act — is moving forward in the National Assembly. So, what do businesses represent to Lee Jae-myung?

Translated using generative AI and edited by Korea JoongAng Daily staff.