In the Republic of Korea, Wednesday 7 April, the two leading South Korean metropolises have elected their majors. Surveys have anticipated conservatives’ success in advance but failed to predict its extent. The elections’ importance is not limited to the two cities but could affect the entire Indo-Pacific. This article is part of the series covering the last year of President Moon Jae-in administration.
The reasons behind the defeat
The recent drop, the lowest since 2001, of the supply of “jeonse” apartments could be considered one of the determinants behind the failure of the governing party. The term refers to the location contract unique to the Country, which determines the rent based on the initial deposit: The highest the warranty is, the lowest your monthly rent will be. The signing parties cannot extend this contract form over the two years following the signature.
This type of contract turns out to be a privileged choice both by individuals with limited financial resources and by owners interested in exploiting, as an investment, the difference between the market price of the property and the deposit paid by the tenant. However, current rules to protect the tenant seem to have discouraged its offer.
Real estate scandals
The decisive factor could have been a scandal of a considerable extent; international newspapers such as Reuters, The New York Times and The Diplomat have dedicated an article to the story, which took place between February and March 2021. The news involves several officials from Korea Land and Housing Corp (LH), some of whom were found lifeless inside their homes. The cause of death seems to be attributable to suicide.
Seoul City Hall was carrying out development projects on some lands. At least 20 LH officials used inside information to buy those terrains that had a meagre market value at the time of purchase. The alleged gain from this illicit operation would amount to approximately 10 million dollars. Apartment prices in the South Korean capital rose 58% during the current administration.
To exacerbate the discontent with the management of the South Korean Democratic Party was also the event that involved the principal economic adviser of President Moon. As a real estate owner, he increased the deposit of his tenant’s jeonse contract by 14% a few days before the before mentioned rule blocked any possible increase over 5%. Although it was not an offence, the resulting media coverage led to his resignation.
The reform of justice and the public prosecutor
Furthermore, the recent reform proposed by the government to reduce the power of prosecutors could be another point in favour of the defeat of President Moon’s party. The controversial initiative saw the then prosecutor Yoon Seok-youl‘s opposition to the government. In late February 2021, he resigned from his position due to an official investigation into alleged favouritism towards Samsung executives during the famous 2016 scandal; that year, he was responsible for the indictment of Lee Jae-yong, vice-president of the chaebol.
Yoon Seok-youl is indeed the leading personality in the polls about the probable future president of the South Korean Republic. After resigning, he issued a statement that many newspapers have interpreted as the prelude to his entry into politics. Furthermore, Nikkei Asia argues that his position can only be between the centre and the conservatives. Despite this, it is difficult to predict his foreign policy stance if he decides to run for the presidency and win the elections.
Indeed, the South Korean justice sector faces a not precisely happy period. In March 2021, it began the first trial for impeachment in the history of the Republic for the judge of the Constitutional Court Lim Seong-geun; the accusations are of alleged interference between 2015 and 2016. Although two impeachment motions against Supreme Court judges were brought to parliament in 1985 and 2009, it was only in 2019 that the latter approved the procedure for the first time.
A challenging year on the horizon
Whatever the real reasons for the Democratic Party’s failure in the recent municipal elections are, there is no doubt that these mark a turning point in South Korea’s domestic and foreign policy. Moon Jae-in’s presidency began with political victories from the point of view of the reunification project carried out by the Democratic party, in stark contrast to the hard line of the conservative predecessor.
The People’s Party has historically been positioned on a line that is not precisely accommodating towards Pyeongyang and more inclined to comply with the Japanese-US strategy of anti-Chinese containment. However, the closeness of conservatives to industrial circles and family-run conglomerates suggests that South Korea may be affected by the Asian ambivalence that we have seen previously from other Indo-Pacific countries.