South Korean President Yoon Suk Yeol. Photo: Asia Times / Andrew Salmon

SEOUL – Sighs of relief emanating from Tokyo and Washington vied with grunts of disapproval echoing through Beijing and Pyongyang after news broke that Yoon Seok-yeol had narrowly won South Korea’s presidential election.

The conservative candidate, who on the campaign trail has signaled a more pro-Japan, pro-US policy, was swiftly congratulated by leaders of those nations.

After a gutter-fighting campaign marked more by low blows than high politics, Koreans hit polling booths on Wednesday to vote in their leader for the next five years. The result: Yoon beat leftist firebrand Lee Jae-myung after a down-to-the-wire vote count on Thursday morning.

The conservative former prosecutor is expected to install more pro-business, free-market mechanisms in what has customarily been a successfully policy-led economy. During his career as a prosecutor, Yoon was tough on white-collar crime, which may hold negative implications for the legally compromised leader of national flagship Samsung.

But the leader who wants to reset Korea’s relations with Japan, upgrade its ties with Washington and toughen its stance against China and North Korea will stand on a shaky platform.

A modest mandate

For one thing, Yoon’s margin of victory was razor-thin at less than 0.7% of votes cast. For another, he is counterbalanced by the National Assembly, where Lee’s Democratic Party of Korea will hold an outright majority (barring by-elections) until April 2024.

While Yoon can push policies and regulations downstream from the presidential Blue House through the line ministries, he will likely face legislative pushback in Korea’s unicameral parliament.

Voting in Korea’s administrative capital, Sejong City, sent a signal. While Korea’s bureaucracy may be loyal, it voted overwhelmingly against Yoon, who strides into the Blue House on May 10.

Yoon will be constitutionally limited to one five-year term and restrained by Korea’s rich and powerful corporate sector. Like the proverbial helmsman on the supertanker unable to shift course swiftly, he will have limited wriggle room to implement far-sighted and deep-reaching policies.

Questions already hang over many of his campaign trail promises – not least because Yoon, who spent his career as a prosecutor, is a political virgin.

“We don’t know his true colors yet: He has been in politics only eight months and has spent almost all that time campaigning,” Park Sang-in, a professor at the elite Seoul National University, told Asia Times. “During a campaign, candidates promise a lot of things that do not mean anything later.”

Yoon’s failure to outline a broad vision, however, may prove a strength.

“This campaign was not run over huge policy or philosophical differences – there was no big theme,” said Michael Breen, Seoul-based author of “The New Koreans. “Expectations are low, as many who voted for him did not like him – they just liked Lee less. As long as he keeps expectations modest, he might do well.”

Ruling party presidential candidate Lee Jae-myung lost the election by a paper-thin margin. Photo: Andrew Salmon / Asia Times

Hello, America

Yoon has a strongly pro-Washington stance, which is no surprise for a conservative in a country that relies on its alliance with the US for its security. Counterintuitively, this means that some of the expeditionary assets that outgoing President Moon Jae-in’s independently-minded leftist administration sought could be ditched as Yoon cleaves more closely Washington.

One likely casualty is a mooted aircraft carrier. During a press conference with Yoon early in the campaign, an accompanying lawmaker told Asia Times that the party saw no point in possessing one.

Yoon has been blurry when it comes to the Quad security partnership that links Australia, Japan, India and the US. He has said Korea should upgrade its participation but has been less clear on actually seeking membership, which would be frowned upon by China.

More surprising are Yoon’s attitudes toward China and Japan, which may reflect public opinion. Two surveys – one by local pollster Sisa-in in May 2021, and one conducted in January this year by Stanford University’s Freeman Spogli Institute – found that South Koreans hold significantly more negative sentiments toward China than toward Japan.

If this trends over the long term, it is potentially seismic.

Goodbye, China

Since establishing relations with China in 1992, Koreans have traditionally had positive attitudes toward a nation to which they are culturally close, and which has become their key economic partner. Conversely, there remains a powerful sense of national victimhood and a sense that Japan refuses to acknowledge its colonial and Pacific War crimes.

But Koreans have grown suspicious about the increasingly assertive Xi Jinping administration, particularly after the events of 2017.

That year, Beijing – angered by the emplacement of a US anti-missile battery in South Korea which it claimed could snoop far into China with its powerful radars – retaliated.

Sanctions included halting Chinese tour groups – key suppliers to Korea’s service economy – hammering Lotte Group’s investments and closing the door on Korean cultural exports, including games, TV dramas and K-pop.

There was an emotive outcry during the Beijing Winter Olympics when netizens led politicians – Yoon included – in accusing China of appropriating Korean national dress in the opening ceremony.

Strikingly, Yoon has said that he will acquire a THAAD anti-missile battery for domestic defense – the same asset that ignited Beijing’s 2017 furies.

A THAAD interceptor is test-launched in Kodiak, Alaska, on July 11, 2017. Photo: Leah Garton / Missile Defense Agency / Handout via Reuters
A THAAD interceptor is test-launched in Kodiak, Alaska, on July 11, 2017. Photo: Leah Garton / Missile Defense Agency / Handout

None of this changes China’s centrality to Korean trade. In 2020, Korea shipped US$136 billion worth of goods across the Yellow Sea – almost double the amount shipped to the number two export destination, the United States, worth $73 billion, according to database Global Edge.

“If Yoon becomes too pro-American and disregards China, it will bring about two major consequences,” said Moon Chung-in, who heads think tank the Sejong Institute – adding that there are also deep value-chain interconnectivities.

Another factor mitigating against big change in China policy is Beijing’s influence over Pyongyang. “If China supports North Korea militarily, with arms and logistics including oil it will pose a major conventional threat to us,” Moon warned.

Welcome, Japan

Highly unusual for a Korean politician, Yoon has held out an olive branch toward Japan. As well as promoting shuttle diplomacy, he has said would seek to meet Japanese Prime Minister Fumio Kishida after meeting his key target, US President Joe Biden.

There are multiple ties to repair with Tokyo.

In the first two years of the Moon administration, Seoul assailed Tokyo by binning a 2015 bilateral deal over wartime “comfort women.” It also called for the seizure of Japanese corporate assets to compensate forced laborers, contradicting the terms of a deal and multi-million dollar compensation package agreed to back in 1965.

A furious Tokyo retaliated by removing Korea from its list of favored trading nations, sparking Seoul’s retaliation and popular boycotts. The feared “trade war” never eventuated, but sentiment was poisoned.

Yet with Moon – distrusted in Tokyo – and ex-prime minister Shinzo Abe – despised in Seoul as a historical revisionist – out of office, Kishida and Yoon could feasibly improve relations.

That would suit Washington, which is endlessly frustrated by squabbles between its two Northeast Asia allies.

But Moon, again, warns of barriers. “If Yoon becomes too soft on Japan, a public outcry will arise,” Moon said. “He cannot retain his pro-Japanese stance, as he stated in the campaign.”

Under the new president, scenes like this could become less common: South Korean protesters tear a huge Japanese flag during a rally near the Japanese embassy in Seoul in 2019. Photo: AFP/Jung Yeon-je

No thanks, North Korea

The long-held aim of Washington – and Seoul and much of the wider world – is denuclearizing Pyongyang. Cynical experts have always called this a non-starter – and current developments may kill the idea.

Ukraine is reeling from invasion after abandoning its nuclear weapons in exchange for security guarantees. One of the past guarantors is the current-day invader – Russia. Neither of the other original guarantors, the UK and US, are willing to fight for Ukraine.

This lends more weight to nuclear deterrence, and Pyongyang had earlier noted how Libya fell after ditching its atomic program. Moon, one of the leading thinkers on inter-Korean relations, admits that current dynamics are problematic.

“Generally, what is happening in Ukraine will teach Kim Jong Un not to give up his nuclear arms,” he said. “But let us see what happens on the Iranian nuclear deal. If Biden makes meaningful progress on Iran, a North Korean settlement can be a real possibility.”

Yoon has said he wants to establish a permanent dialogue channel between both the Koreas and the US, and will offer aid in synch with disarmament steps.

But he also sticks to the “denuclearization first, sanctions-relief later” approach that Pyongyang rejected at the 2019 Hanoi summit, evinces no interest in a Korean War peace treaty, and favors sharpening Seoul’s pre-emptive strike forces.

This all differs from the policies of the Moon administration, which were far kinder and gentler toward Pyongyang. But Moon Chung-in, who knows Yoon’s advisors, expects pragmatism to trump hawkishness.

“I know his staff, they are aware of the constraints and they will be much more cautious,” he predicted. But he warned that if Yoon proves hardline, North Korean ICBM and nuclear tests are likely.

Pro-market, pro-business, pro-nuclear – anti-Samsung?

Yoon inherits a beast of an economy. Last year, GDP growth hit 4% while the Bank of Korea anticipates 3% in 2022. However, Covid is lingering: The country has for the last two days suffered daily new infections north of 300,000 cases.

Yoon – in classic conservative style – is expected to push business-friendly policies of small government, deregulation and labor market flexibility. “He is a believer in Milton Friedman, so in that sense, he is business-friendly, business-minded,” said Seoul National’s Park, a corporate regulation expoert.

However, Yoon has indicated that he will continue the flow of cash to the startup economy – a program initiated during the Park Geun-hye administration (2012-2017) which reached fruition under Moon (2017-2022), with Korea now a Top 10 global incubator of “unicorns.”

Yoon will be steering Korea’s heavy industry through the stormy waters caused by the war in Ukraine. Photo: Andrew Salmon / Asia Times

Still, the locomotive of Korea’s economy is big business. A phrase much discussed in the 1990s and early 2000s, “conglomerate restructuring” is rarely heard now. Yoon is unlikely to tinker with the established practices of such world-class brands as Samsung, Hyundai, SK hynix or LG, despite a widespread belief that these massive companies abuse their power.  

But Yoon might surprise.

“He had no agenda for chaebol reform in his campaign promises,” Park said, referring to Korea’s family-run conglomerates. “But as a prosecutor, he had a record of prosecuting chaebol businessmen for fraud and corruption and has been very tough on business crime.”

This record could influence the near-endless corruption court cases against Samsung’s de facto leader and heir, Lee Jae-yong, which are likely to conclude during Yoon’s term. While courts are, de jure, firewalled from politics, justice ministers wield influence and presidents have special powers.

“I don’t know what the courts will decide, or whether Yoon will give Lee a presidential pardon,” Park said. “That will be the real litmus test.”

For Korea’s globally-integrated economy, the wild card is the Ukraine war. Korea, a net-energy importer, faces soaring energy and commodity costs – particularly given the won’s current weakness against the dollar. In February, inflation rose 3.7% year on year, the fifth consecutive month that inflation topped 3%.