Asia Minute: South Korean Political Scandal Taking an Economic Toll
South Korea’s president has put her political life in the hands of that country’s parliament. She says she’s willing to resign, but there’s a catch—and it’s left many observers confused about the future. HPR’s Bill Dorman has more in today’s Asia Minute.
It seems like South Korean President Park Geun Hye is offering to resign…to step down before her five-year term expires in February 2018. She told a national television audience Tuesday that she would let South Korea’s parliament “decide my fate, including a plan to shorten my presidential term.”
Wednesday morning, Korea’s three opposition parties rejected that offer, calling for an immediate resignation and saying they’ll continue to push for impeachment. Allegations of influence peddling surround a close friend of the president’s outside government, and at least two political aides.
Street protests against the president are growing, and her approval rating has slipped to just 4%. South Korea’s Finance Minister is among those warning that the protracted political fight is hurting the economy.
So far, Korea’s main stock index has not been hit hard. The Kospi has traded in a narrow range in recent days, and is down only about 4% from its recent highs in early October.
But the consumer confidence index hit a seven-year low this month. And an economy with slowing factory output and slumping exports is unlikely to get any help from a fiscal stimulus package—because that would need approval from the National Assembly; which is currently pre-occupied with a presidential scandal.