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| The Upcoming Korean Presidential Election |
| Will the liberals win again this year? |
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Victor Foo (victorfoo)  |
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Published 2007-08-13 11:25 (KST) |
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| This article is only lightly edited. <Editor's Note> |
Five years ago, when the liberal party held a primary election, the current President Roh Moo-hyun won the primaries against the more established politicians of his party who were more favored by the party elders. This victory was indeed a surprise as politics in the country was dominated by corrupt elites. He got the nomination in May 2002. Fast-forward to 2007. The liberal party is slated to hold primary elections next month and will choose a candidate by mid-October. One might wonder whether two months of political campaigning by a candidate from the newly created liberal party will be enough to end the conservative party's lead in opinions, which is at an all-time high. It seems the conservatives would win if the presidential election were to be held now instead of in December. Whether the opinion polls change in the coming months remains to be seen.
Economic Issue
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FROM THE SECTION |
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| This year, President Roh had a very rough start, with most Koreans strongly dissatisfied with him due to his perceived mismanagement of the economy. His approval ratings reportedly dipped below the 10 percent range. However, the economic situation was not as gloomy as even some Korean private economic research institutions expected. The economy had fared better than expected due to brisk exports, faster than expected recovery in private consumption and capital expenditure. As a result, the economic growth forecast had been upgraded. Recently, HSBC holding economist upgraded it to 4.8 percent from 4.5 percent. So far, various economic data coming out of the country has been robust. One encouraging sign is that private consumption in the nation has been supported by rising income and declining unemployment rate. Although youth unemployment rate remains high, it is declining and people are beginning to find it easier to find jobs. However, the main issue is that whether or not the average Korean citizens are able to feel the impact of the recovery. The fact is that GNI, gross national income, is still growing below GDP, gross domestic product despite that the gap in the growth between the two are declining. This is the main reason why voters are still not feeling the impact of the recovery yet. If income is rising at a rate slower than inflation, voters still feel the hardships. However, GNI growth might be higher than GDP growth later in the second half of the year and possibly in the fourth quarter. If that happens, it will provide a boost to the incumbent's approval ratings. However, even if that is the case, voters will still worry whether or not the recovery that they feel would last. This anxiety should be properly addressed by the liberal party candidate that economic reforms and growth would continue to recover and that would be a top priority as economy is the core issue of this year's election. If the economy keeps recovering and becomes more widespread, that would set a very good foundation for the nation's growth and it will make the job of the next president easier to manage the economy. So, Roh could well leave his positive legacy on transferring the recovering economy to his successor to manage or maintain.
North Korean Issue
In late August, the two Korean leaders will hold submit. It is expected that the North would demand economic assistance in the form of energy aid and infrastructural construction to revive its sagging economy. For the South, its top priority would be to get North Korea to completely denuclearize its weapons program including submitting a list of its nuclear power stations and its weapons. If Roh can accomplish these tasks, it would yield several benefits. First and foremost, it would leave a legacy of lasting peace on the Korean peninsula and pave the way for the normalization of North Korea -- U.S. relations and peace treaty to replace the ceasefire that ended Korean War in 1953. Roh will be remembered for this. According to a news report by Arirang TV, a survey conducted by traditional conservative newspaper even shows that majority of Korean embrace positively the summit in the sense that at least the summit is a chance to resolve the nuclear issues. However, the public is still skeptical on the outcome of this summit because the first summit was held as a result of payment made to the North Korean leader by Hyundai Corporation and Kim Jong-il later renege on his promises of stop nuclear development. Looking at this situation, if Roh can manage to get Kim to completely denuclearize and provide economic aids as promised, this will add momentum to the next six party talks to ensure that a specific date on denuclearization deal be completely implemented by the year end. If the denuclearization plan proceeds smoothly, it will boost Roh's approval ratings quite significantly because skepticism has been replaced by positive results of the summit that exceeds the public expectations. The public will feel much more secure and foreign investment will increase in the South. As a result, the economy will be more sustainable in the long run. What the public wants is complete denuclearization on Korean peninsula for easing tensions and economic uncertainty.
Labor Issue
One issue that Korea still suffers is militant labor unions. Although the statistics points out that number of labor strikes, number of days lost to strike is declining, this is not enough to guarantee that a cooperative labor-management takes foot firmly. One example is the persistent annual labor strikes that occur in Hyundai-Kia Motor. This company is well known for labor strikes. As one Korean recall, labor strike is a ritual every year at the company. Apart from that, labor unions from Korea Metal Workers Association (KMWA), which includes members of Hyundai labor union, protest against the Korea-U.S. FTA. However, a growing number of Hyundai labor union realizes that public are tired of strikes and they have only held two days strikes instead of five days as planned against the KORUS-FTA. The new head of the Korea Confederation of Trade Union (KCTU) is moderate and consultative. He is more willing to negotiate rather than strike. Unfortunately, some labor members of KMWA are still very militant. This might yields negative impact on the economy. Recently, Kia Motor held a strike in demand of a wage raise, which is a common ritual every year. Now, to reduce such common strikes against FTA or any other related issues such as wage rise or any issues, the government must ensure that the labor reform bills put forwarded in September 2006 be passed smoothly. However, the bill stalls because members of KCTU oppose the bill in a violent manner. Now, the urgent task is for government, labor unions and business to get together again to pass this bill smoothly by ensuring that there would be no more conflicting disagreements among any groups. If the bill can be passed, this is so significant that it can dramatically boost Roh's rating. This is because the public is tired of frequent labor protest. With the passing of the bill, labor unions pledged to work in a more cooperative environment with their management. Roh can be seen as effective in resolving labor conflicts and again leave a positive legacy on a culture of cooperative labor-management relations.
Tasks for Roh
One piece of good news is certain though this year for the president. Despite the three main issues that the president must manage with effective skills, his approval rating has somehow been rising to the low 30 percent range from a single digit last year. This is attributed to the successful conclusion of KORUS-FTA. If Roh can successfully capitalize on this achievement to resolve North Korean nuclear issue, labor-management reform bills and ensuring that the economic recovery continues to spread and become broad-based, the election this year could well turn out to be a dead heat between the conservatives and the liberals. The opinion poll during the last month before the election is scheduled to hold on Dec. 19, 2007, could turn out to be a very surprising miracle in favor of the liberals. The miracle nevertheless has to be supported by a strong liberal candidate who is knowledgeable and has strong visions on economic issues to attract votes, as economy is the central issue of this election. Then, the liberals can win again for third consecutive times in the presidential election.
The Significance of a Liberal Victory
One thing for sure is that liberal victory would ensure that the reforms policies started by Roh could well continue un-reversed. His corporate governance reforms, anti-corruption efforts have begun to bear fruit in the country. One example is the arrest of Hanhwa chairperson over the beating of a bar worker. Another example is the strictly independent verdict held by the court to give a six-year prison sentence to Hyundai chairman Chung Moong-koo. All this clearly shows even the head of a powerful large corporations can be subject to the law now and unlike in the past where they can be freed quite easily. These corporate scandals have vividly shown that Korea is on the right track of becoming a transparent society. Now, an increasing number of corporations begin to launch corporate governance reforms to ensure more independent accounting reports, more active minority shareholders. All these signal to the right direction Korea is heading to in the long run because it is beneficial to the economy. Thus, it is important these reforms continue. Otherwise, Korea's competitiveness could suffer very badly and the nation could turn back to its old crony-based economic capitalism before 1997.
Another area of achievement of Roh is political reform. He has completely eliminated imperial presidency. Previously, presidents tend to act like kings and they can abuse its power by telling prosecutors or tax officials to punishments any opponents that they do not like. As a result, corruption became rampant. A system of check and balance are severely constrained. Since Roh took office, he had given autonomy to state officials so they can carry out their tasks independently. He gave system of check and balance where the president and all other politicians can be held accountable if they commit any wrongdoing. A true two party system is now truly emerging. Party ideologies and candidates' policies become more important and personalities began to dominate less. All this means that Korean politics become much more mature and transparent which led to a reduction in corruption. One area where Roh is still not so successful is to root out political regionalism that has been so rife. Traditionally, politicians tend to rely on their hometown support to win elections instead of relying on their policies. Roh had tried to change this pattern but unsuccessful due to intense opposition from the old guards of the conservative party. Nevertheless, the reforms that had been achieved so far by Roh points out that Korean politics are becoming more advanced. If the liberal wins, his political reforms will surely continue un-reversed.
Thus, a liberal party would not only ensure a certain continuation of the current president's reforms policy. It would also prompt the conservative party to rethink where they have gone wrong and what they can do to revive the party's reputation if the conservative turns out to lose this year's election. If the conservative can successfully reform itself as a new conservative party dominated with young reformists, Korea will have a truly strong two party system firmly rooted.
What if the Conservatives Win?
A conservative factory can certainly point out that its economic policy would favor the big companies more. In theory, this will increase business investment and the national economy will grow higher. However, this does not mean that it is all that positive from a longer-term perspective. It would run the risk of stalling the reform policies started by Roh. If that is the case, Korea might return to crony capitalism before 1997. Apart from that, tensions with North Korea will rise, as the conservatives are generally much tougher towards the North. Labor unions can possibly escalate as conservatives can possibly implement policies that favor only the business at the expense of labor welfare. So, the impact of the conservative victory in the longer term could put the country in jeopardy. This cannot be truer if Park Geun-hye, the daughter of President Park Chung-hee, wins her party's nomination and becomes the president. She is known to be conservative economically, politically and socially. She opposed the private school bill proposed by Roh. The bill is so important that by filling the board of directors with outsiders, transparency can be guaranteed in that they will monitor corruption in education. Yet, she claimed that this interferes with the school's system badly that the quality will decline. In other instance, she opposes in 2004 the bill passed by Roh's party to ensure minority shareholders' are protected against corporate malfunctions. These examples show how the danger that her victory could turn the clock back on Korea to its old way of doing things. Meanwhile, Lee is by comparison are reformist. However, he might turn the risk of stopping corporate governance reform when he mentions earlier that the incumbent imposes too much control on chaebols. His statement is still ambiguous and open to debate. He also adopts a tougher stance on North Korea and labor unions just like other conservative politicians. Thus, with only one of these two politicians are surely to be nominated and compete in the election, the victory by either Lee and Park can mean reversal of the important reform policies started by Roh in view of the long-term beneficial economic gains especially in area of corporate governance. Given this possible circumstance, the optimism that Korea could one day become a mature nation economically, politically and socially might be a doom.
Conclusion
For the past five years, although Korea faced numerous difficulties especially with the economic problems of high youth unemployment rate, falling incomes for the middle and working class, which caused the incumbent to be unpopular, all that is not as gloomy as it looks. The economy begins to show clear signs of recovery and it is spreading across all income classes as wages are rising and unemployment is falling. This is made possible by the proper management of the current president to deal with the outbreak of the credit card bubble burst, the economic reforms to install a proper corporate governance structure and the recently announced plan to improve business environment and enhance the competitiveness of the service sector. Along the way for the past five years, the pain that Korea had experienced is inevitable and is needed for the long-term benefit of the country.
The question now is that will the people choose the liberal government to maintain the current president's reform policy so that the country will grow to become more competitive advanced nation in the long run or the conservatives who will risk to put a brake on the president's plan and turn the clock back to the old days of crony-based capitalism. In the eyes of many analysts, Korea certainly needs to continue with its reform policies in order to survive in the globalized world and eventually join the leagues of advanced nations. Otherwise, it would just remain where it is or be left behind even by emerging countries such as China or India in the economic and technological fields. So, Korea has two clear key choices to make in this years' election.
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©2007 OhmyNews
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