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 Will President's Moon Jae-in's response to novel coronavirus disrupt his party's chance of success this April?

 

Rival Parties Clash on Appropriate COVID-19 Measures

 

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As elections for the General Assembly approach on April 15,  COVID-19  may have become the central issue in the campaign. Currently, the liberal Democratic Party (DP) who hold a majority of seats in the National Assembly, led by South Korean President Moon Jae-in, is favored to retain their majority and even increase their number of seats this upcoming cycle. They aim to steer off Korea’s Conservative United Future Party, which has seen increased popularity in the recent months. An election that was once seen as a midterm referendum on Moon and his policies has been upended by the Coronavirus pandemic. This pandemic could cut short both the Democratic Party and Moon’s aspirations, as they will have to face an economic setback, ongoing health crisis, and vicious criticism from the opposition.

 

The Democratic Party of Korea rose to power shortly after a disastrous corruption scandal in 2016 which ousted the former conservative party President, Park Geun-hye. Moon, who came to office promising to narrow the wealth gap, increase employment, and ease tensions with the North, once enjoyed approval ratings of 80 percent. However, Moon’s major economic policies have seen mixed results, with sluggish growth, due in part to the ongoing US-China trade war, and a diplomatic spat with Japan. Despite Moon’s approval ratings hovering around 40-50 percent mark, according to a recent survey by Gallup Korea, 39% of respondents said they would vote for the Democratic Parry, followed by 22% for the conservative UFP, and 6% for the leftist Justice Party. Still, 28% said they supported no party.

 

The Democratic Party’s biggest opposition comes from the newly formed Conservative United Future Party (a merger of several conservative parties), which is slowly gaining momentum throughout South Korea. Conservatives aim to win back a majority of seats and have used this pandemic to reawaken anti-Chinese sentiment across South Korea and highlight failures of the Moon government in their response to this global crisis.

 

Condemning the Moon administration for incompetent handling of the crisis, the conservatives are attempting to make political gains by criticizing Moon for not efficiently combating the spread of the virus, and in fact inadvertently adding to the influx of cases throughout South Korea. Moreover, they have capitalized off of growing Anti-Chinese sentiment in South Korea and have rallied against the administration donating millions of face masks to China in the early days of the virus, and for the government’s refusal to close its borders with China. To amplify matters, over 700,000 people have already signed a petition asking the government to reconsider its decision to not close travel routes from China. Additionally, another petition, which garnered more than 1.4 million signatures in the short span of two months, demands to impeach Moon for mishandling the COVID-19 crisis. Indeed, Moon has made known his reticence to cut ties with China, South Korea’s largest trading partner. Moon fears cutting off trading routes will only further damage an already weakened South Korean economy.

 

 

Public Opinion Favors Government's Handling of Crisis

 

Korean election-unsplashDespite more than 8,565 people being infected and over 91 deaths to date, analysts say the government's handling of the crisis will be a boost to Moon and his party. According to Sean King, Vice President at Park Strategies, and an Affiliated Scholar at the University of Notre Dame’s Liu Institute for Asia and Asian Affairs, “Moon initially took a public opinion hit for not having closed South Korea to mainland Chinese visitors. But South Korea’s handling of COVID-19 is now widely seen as a success. Hence any opposition attempts to make political hay of the issue could easily backfire.”

A recent survey backs up this sentiment, showing that 64 percent approve of the government’s response to the COVID-19 outbreak. Worldwide, countries are actually looking towards South Korea as a model on how to effectively combat the virus. South Korea has chosen the unique position of administering effective means of detecting the virus and the openness to report results. The KCDC, Korea’s national health association has administered more than 40,000 tests for coronavirus, and more than 7,500 coronavirus tests and aims to steadily increase the number of people regularly tested for the virus. Moreover, the country has implemented other strategies to combat the virus such as imposing strict border checks on visitors from China, Italy, and Iran, requiring them to sign up by a smartphone application to track whether they have any symptoms such as fever.

 

 

 Korean Markets Devastated by Novel Virus

 

Despite approvals for Moon’s handling of the pandemic, the virus has been a blow to the South Korean economy. International trade with the country’s largest trading partner China has ebbed significantly. Furthermore, small and local businesses such as restaurants, cinemas, department stores have closed in order to constrain the spread of COVID-19, exacting additional damage to the economy. Total motor vehicle exports dropped 27.4% in the first two months of 2020, continuing a downward trend dating from August 2019, and Hyundai Motor, one of South Korea’s largest industries, has even shut down its factories as the outbreak increased. Airlines have seen a major plummet in stocks, as travel coming in and out of South Korea have reduced. Korean Air, Korea’s largest airline and flag carrier, has seen a total loss of 24.86% in wake of the epidemic. To help shore up the economy, Moon recently pledged US $39 billion in emergency financing for small businesses.

 

Heading into the April elections, the Coronavirus pandemic and the resulting economic turmoil are becoming the central issues in the campaign. With elections less than a month away, President Moon has a greater incentive to funnel money into the economy to forestall and ease South Korean’s concerns of economic turmoil. As it stands, the election is the Democratic Party’s to lose, but the effect of the pandemic will demand answers and action on how to revive a virus-torn economy and quell the fears of those who are suffering as a result of this global epidemic.

 

For more information on Gryphon’s Global Strategic Advisory and Political Risk Practice, please contact Matt Hays – mhays@gryphon-strategies.com and Rich Finley – rfinley@gryphon-strategies.com

 

 

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