Han’s impeachment today was driven by his refusal to appoint three new judges to the Constitutional Court. The court, typically consisting of nine members, requires at least six judges to uphold Yoon’s impeachment.
With only six judges currently on the bench, a single dissenting vote could have saved Yoon. This is the first time in Korean history that an acting president has been impeached.
Finance Minister Choi Sang-mok has succeeded Han as acting president while continuing his role as finance minister. His commitment is to “minimize the confusion in state affairs”, but he has not disclosed whether he will follow Han’s stance on the appointment of judges.
Capital Economist analysts suggest that if Choi does not yield to the opposition’s demands, he could face impeachment, further extending the political crisis in Korea. The quickest resolution would be for Choi to appoint new judges, likely leading to the Constitutional Court upholding Yoon’s impeachment. This could then trigger fresh presidential elections within 60 days.
The People Power Party (PPP) is currently unpopular, and there’s a possibility that Lee Jae-myung of the opposition Democratic Party (DP) could be elected president. Lee narrowly lost to Yoon in the 2022 presidential election. The DP, more left-wing than the PPP, might reverse Yoon’s plans to reduce state size and is also in favor of more conciliatory ties with North Korea and China.
Signs of the crisis impacting the economy are already visible. Consumer confidence plunged in December by the largest margin since the COVID-19 pandemic began, with the Bank of Korea’s composite consumer sentiment index falling by 12.3 points to 88.4 on December 23. A reading below 100 typically signals contraction.
The December PMIs and trade data, due to be released early next month, will reveal if the disruption has affected the industrial sector.
The crisis is occurring against the backdrop of a struggling economy, with GDP growth at just 0.1% in Q3 and projected to grow by only 2.0% this year. The political polarization and resulting uncertainty could deter investment in Korea.
Thailand, a politically-divided Asian country where martial law was declared a decade ago following a coup, serves as a warning, having subsequently underperformed.
The Korean currency fell by 0.3% and the equity market by 1.0% today, both now down by roughly 4% since Yoon declared martial law on December 3.
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