- Wave of reforms sweep South Korea on back of new administration
- Government unveils US$ 10 billion fiscal package
- Measures to enhance corporate governance and transparency of chaebols
Structural Reforms in South Korea
In the wake of President Moon Jae-in’s victory at the South Korea presidential election last month, Moon has positioned himself as a pro-reformist – determined to unite a country torn by bitter divisions after a long-drawn corruption scandal that engulfed a nation.
Former president Park Geun-hye who was impeached and removed from office is now undergoing trial for corruption and for misusing her position to gain personally.
With the scandal now behind the country, South Korea could see a sea change of events which may spell positively for the country in terms of investment opportunities.
Big Test Ahead for Moon Jae-in
Son of North Korean refugees – President Moon campaigned under a pro-reform agenda to clean up corruption and take on the powerful family-run chaebols which traditionally held strong government sway.
The 64-year old, who practiced human rights law before turning to politics, served as chief-of-staff to former president Roh Moo-hyun back in 2004.
A left-leaning Democrat, Moon easily won the election securing 41% of the total votes, beating other conservative and centrist candidates.
Whilst global attention was fixated on mounting tensions between North & South Korea, ultimately it was the economy and concerns of governance that lingered on the minds of South Koreans as they head to the ballot box.
Youth unemployment was a national concern, reaching 11.2% in April which is twice the national unemployment rate.
Rising inequality was another focal point, whereby it was highlighted that the top 20% of income-earners in South Korea made 9.32 times more than those in the bottom 20% as of end-2016.
South Korea’s 1Q’17 GDP reading was revised upwards to 1.1% from 0.9% initially, largely from gains in the construction sector and higher exports.
However, private consumption grew just 0.4 % in the same quarter which was well below overall economic growth.