South Korea: Politics

Background:

South Korea’s Constitution was first drafted in 1948 at the nation’s independence. While the first direct election was held in 1948, South Korea underwent various different military dictatorships until the first presidential election in 1997. Since independence, South Korea has been considered a constitutional democracy. Currently, the government is divided into three branches: executive, judicial and legislative.

At the most recent parliamentary elections in December 2007, Lee Myung-bak, former mayor of Seoul and former chief executive of construction at Hyundai Group, and his Grand National Party (GNP) won a landslide victory. The GNP, founded in 1997, is known as a conservative party and the main bases of popular support come from conservatives, the traditionalist elite and rural populations (not including farmers). Geographically, the GNP is strongest in the Gyeongsang region. The GNP’s main policy platform includes small government, pro-business and entrepreneurship, free market principles, free trade and lower taxes. The GNP believes in maintaining a strong alliance with the U.S. and has more recently adopted a hardline policy on North Korea.

The main opposition party, the Democratic Party (DP), was founded in 2008 from the merging of the Uri Party and Millennium Democratic Party. The main constituents of the DP include the middle and working class. The DP is considered a liberal party and is known to be reconciliatory towards North Korea, pro-working class and welfare, and a desire to lessen the dependence South Korea has on the U.S. security alliance.

Since February 2008, early on in his five-year term, Lee has faced enormous pressures both economically and politically. He has had to focus on the ailing economy and the liquidity and currency squeeze, implementing several fiscal stimulus and credit measures to cushion South Korean workers and companies from the global financial crisis. Meanwhile, his high popularity has been in decline, especially after the 2008 decision to resume imports of U.S. beef, which prompted massive public protests. Political instability heightened in 2008 amid deepening political divisions within the GNP and between the GNP and DP. The suicide of former president Roh Moo-hyun in 2009 and a worsening political and economic relationship with North Korea has exacerbated domestic political tensions. A fragile and uncertain global economic environment and weak labor market led the government to extend several fiscal and credit stimulus measures and pressure the central bank to keep interest rates on hold for longer. However, once South Korea’s economy showed signs of recovery, the government began working on implementing exit strategies, including interest rate hikes, which could create further public dissatisfaction.