South Korea’s Next President The rule of law prevails in Seoul, even as strategic threats mount.
https://www.wsj.com/articles/south-koreas-next-president-1489187746
South Korea’s Constitutional Court unanimously decided Friday to remove President Park Geun-hye from office. Her successor, who must be elected in the next 60 days, will likely come from the left-of-center Democratic Party. That raises important policy questions for Seoul, both domestic and international, but it is also an important reminder of the strength of the South’s democratic institutions.
Ms. Park’s dramatic downfall began last October, following allegations of influence-peddling and corruption by her confidante Choi Soon-sil. By December Ms. Park had been impeached by the National Assembly, a decision the court’s ruling confirmed while Acting President Hwang Kyo-ahn governs in her place. Gerald Ford took over from Richard Nixon in 1974 by declaring “our Constitution works,” and South Koreans can now make the same boast.
The challenges for Ms. Park’s successor will be heavy. Pyongyang’s belligerent young dictator has accelerated his nuclear and ballistic missile programs even as he murders his political rivals overseas. One consolation is that the two leading Democrat candidates, Moon Jae-in and Ahn Hee-jung, have moderated their opposition to this week’s deployment of the U.S. Thaad missile defense system in recent months. This reflects the reality that South Korea can’t afford to alienate the Trump Administration when the U.S. remains the guarantor of its security.
The next South Korean administration will also have to act when it comes to its economic system. The scandal that brought down Ms. Park involved the country’s largest conglomerates, known as chaebol. On Monday prosecutors released a report that described how Samsung executives allegedly asked Ms. Park for government favors, and she asked officials to support a Samsung merger.
That merger of two subsidiaries in 2015 epitomizes the corruption at the heart of Korea Inc. Minority shareholders lost an estimated $7 billion in a deal that allowed Chairman Lee Kun-hee to pass control of the chaebol to his son Lee Jae-yong. Government regulators failed to protect shareholder rights, and the Park administration used the National Pension Service to help Samsung win a proxy vote.
The younger Mr. Lee is now on trial for bribery and embezzlement. Samsung will likely have to adopt a more transparent ownership structure, which will benefit shareholders.
That’s a promising outcome, but new laws are needed to extend shareholder capitalism across the economy. The scandal might never have come fully to light had it not been for the muscular shareholder activism of New York-based hedge fund Elliott Associates in opposing the Samsung merger—another example of how the forces of “globalism” can help make national politics more democratic and accountable, not less.
The cases against Ms. Park and Samsung are a reminder of the danger of economic nationalism and industrial policy giving officials discretionary power over business. The next President has an opportunity to create a more entrepreneurial and competitive economy, even while staring down the North Korean threat. In both cases, closer strategic and economic ties to the U.S. strengthen will help.
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