Maneuvering through Korea’s Political Turmoil

With the impeachment of South Korea's former President Yoon Suk-yeol, all eyes are now on the snap presidential election set for June 3^rd. Yet, the shadow of Yoon's martial law declaration continues to lurk beneath the surface as a reminder of what is at stake in this upcoming election. With this, the Sungkyun Times (SKT) will examine the challenges that the country has faced and explore potential paths ahead.

Korea’s Political Storm

-Impeachment Unraveled

Former President Yoon Suk-yeol shocked the country by declaring martial law on the night of December 3^rd, 2024, largely criticizing the main opposition, Democratic Party of Korea (DPK), which makes up the majority of the National Asssembly, for paralyzing his administration. According to Article 77 of the Constitution of the Republic of Korea, martial law can only be declared “in times of war, armed conflict, or similar national emergency” to meet military necessity or to maintain public order. However, because he violated constitutional powers and other laws in the process, the National Assembly repealed it within six hours, and Yoon’s impeachment motion quickly followed. Generally, after the motion is approved by at least 200 National Assembly members in the plenary session, the president is suspended, and the prime minister becomes acting president. Accordingly, the Constitutional Court holds a trial within 180 days, where six justices out of nine must vote for the president to be removed and re-elected within 60 days. The motion filed by the six opposition parties was on the charges of insurrection, abuse of authority, and special obstruction of public duty. They argued that Yoon, amid low ratings, declared martial law and deployed military forces to neutralize parliamentary oversight. Although the first motion was rejected, the second motion was passed on December 14^th with 204 votes, initiating Yoon’s impeachment trial at the Constitutional Court of Korea.

-Trials and Tribulations

Yoon’s impeachment trial proceeded with the verdict expected in late March, but it was repeatedly delayed. According to legal experts, after concluding the proceedings in court, the justices reviewed reports from the Constitutional Research Institute Task Force (TF) and examined each evidence by holding deliberations. However, the court rescinded Yoon’s detention due to the expiration of the detention period and unclear legal proceedings before the ruling, which raised discussions about its possible influence over the final verdict. Following his release, Yoon thanked his supporters, and the ruling party welcomed the decision as “wise, albeit delayed,” while the opposition criticized that “the prosecutors’ leniency has endangered the citizens.” The verdict, which had been postponed to April, was finally announced on April 4^th at the Constitutional Court. At 11:22 a.m., Acting Chief Justice Moon Hyung-bae announced the unanimous verdict to uphold the impeachment, igniting tears of joy and anger among the citizens. Although the impeachment has been concluded, Yoon’s martial law declaration remains a decisive moment that has affected Korean politics, society, economy, and diplomacy.

Political Butterfly Effects

-Politics Lacking Unity

The series of events that preceded the verdict raised various issues for the country. Amid growing controversies, political polarization worsened as supporters of the ruling People Power Party (PPP) and opposition parties took increasingly opposing stances. For instance, since December 2024, there have been pro-impeachment protests from Yeouido to Gwanghwamun Square with opposition parties, while the Liberty Unification Party held weekly anti-impeachment rallies in the Jongno District. This was also evident in a survey by the East Asia Institute in February 2025, which found that 69% of DPK supporters, and 58.8% of the ruling PPP supporters “strongly dislike” each other. In an interview with the SKT, Jeong Tay, a Professor of Sociology at Sungkyunkwan University (SKKU), expressed concerns that “even in a divided society, there should be a fundamental recognition that we belong to the same community, yet today that sense of unity is collapsing.” The tension not only resides among citizens but also between politicians in the two main political parties. When the verdict was repeatedly delayed during March, the DPK actively attended pro-impeachment rallies at Gwanghwamun Square, while the PPP criticized this as an “internal rebellion”. If these conflicts persist, bipartisan cooperation will become difficult even in the next administration, delaying urgent matters and future policies.  

-Foreign Exchange in Doubt

Korea’s economy grew uncertain as foreign investors and the foreign exchange (FX) market immediately reacted to the martial law declaration. After the proclamation, foreign investors were quick to start selling off their investments. According to Herald Biz, foreign investors sold approximately ₩1.6 trillion between December 4^th to 6^th, surpassing the sell-offs during former President Park Geun-hye’s impeachment in 2016. Such large-scale foreign investor sell-offs can lead to bond price declines and accelerate capital outflows, increasing the KRW-USD exchange rate. In fact, right after martial law was declared, the exchange rate surged significantly from ₩1,402 to a peak of ₩1,442. Exacerbated by external variables, this rising trend is ongoing, raising concerns of inflation and external debt burdens. If this situation persists, it can heighten the risk of economic slowdown. In fact, the Organization for Economic Cooperation and Development (OECD) initially projected Korea’s 2025 economic growth rate at 2.1% in its December 4^th, 2024 report. However, this prospect dropped to 1.5% in the OECD Interim Economic Outlook of March 2025. While inflation and fiscal pressure were seen as part of the problem, the impeachment process was also considered one of the factors contributing to economic uncertainty. Therefore, effective measures are needed for a swift economic recovery.

-Diplomacy and Security at Risk

Korea’s diplomacy and security also grew uneasy, particularly its relations with the United States (U.S.). Pivotal South Korea-U.S. diplomatic meetings that had been previously scheduled were temporarily canceled after the martial law declaration. Subsequently, the U.S. Department of Energy (DOE) included South Korea in the Sensitive and Other Designated Countries List (SCL) for the first time, with U.S. experts suggesting that the declaration may have influenced this decision. This could limit cooperation in advanced technologies such as nuclear energy and artificial intelligence, delaying joint research and technology transfers. Moreover, as Korea remains in an armistice state, the prolonged vacancy of the Minister of National Defense is unprecedented. Although Vice Minister Kim Sun-ho is serving as the Acting Defense Minister, a new successor is yet to be appointed, threatening national safety. Normally, under the principle of civilian control, defense policies should be decided by civilians and carried out by the military, meaning the minister should not be a military official. However, this is a delicate matter, given the complexity of military ties and interests involved. The difficulty of the ruling and opposition parties reaching an agreement further challenges the issue, as timing and candidates must be addressed. 

Dispersing the Storm

-Minimizing Political Discord

To address these key issues, various solutions should be considered. First, to reduce political polarization, more opportunities should be provided to create spaces for dialogue between citizens. For instance, in the U.S., an organization called StoryCorps runs the program One Small Step, where people with different political beliefs engage in conversation to understand each other’s perspectives with the aim of reducing political bias. In an interview with the SKT, Jung Jong-hyun, a Professor of Sociology at SKKU, explained, “While programs that facilitate dialogue between people with differing beliefs may serve as a partial solution, the most crucial factor in accepting opposing political views is said to be direct interaction with others.” Likewise, establishing such programs could be a small step toward building understanding and trust in society. Furthermore, the next administration should prioritize reducing political polarization as one of their key agendas by reforming the internal decision-making processes within political parties. For example, the National Assembly Futures Institute suggested in their September 2024 report that the overrepresentation of hardline supporters within parties should be reduced to a more inclusive political system that represents a broader range of voter preferences. Moving forward, future governments could consider such reforms and social dialogue platforms to reduce political polarization.

-Market Stabilizing Strategies

Strategies are needed to attract foreign investors, balance dollar demand in the FX market, and stabilize the economy. First, the government should focus on improving support systems for foreign investors. For example, the government proposed a comprehensive package of financial incentives to attract foreign investment in February 2025. This means if a foreign company establishes regional headquarters in Korea, the government would offer cash subsidies of up to 75% of the investment amount for this year. Moreover, the government expanded the forward exchange position limits to stimulate foreign exchange inflow and stabilize the currency. This refers to the maximum allowable exposure a financial institution can have in forward exchange contracts, which is an agreement to exchange at a specific rate in the future. Thus, on December 20^th, 2024, domestic banks raised their limits from 50% to 75% of equity capital, while foreign banks increased theirs from 250% to 375%, expecting a boost in foreign currency inflows into the FX market as more contracts are made to increase liquidity and stabilize the market. By attracting foreign investors and sustaining the FX market, the economy can gradually recover for a more long-term growth trajectory.

-Readjusting Diplomacy and Security

Finally, it is essential to strengthen the momentarily shaken South Korea-U.S. relations. On December 23^rd, 2024, Korea held talks with former U.S. Deputy Security of State Kurt Campbell to resume delayed diplomatic meetings. Furthermore, in March, the Foreign Affairs and Unification Committee passed a resolution to reinforce the alliance, especially in nuclear energy and artificial intelligence, under the Donald Trump administration. Joint military drills, including Freedom Shield (FS25), are also expected to further build defense readiness. While strengthening these diplomatic ties, Korea should discuss lifting the sensitive country designation as well. Moreover, both major political parties must acknowledge the urgency of appointing the Minister of National Defense. In the U.S., the National Security Act requires the defense minister to be a civilian, and former military officers must be retired for at least seven years, to avoid conflicts of interest. For example, George Marshall, the third U.S. Secretary of Defense, worked as a civilian for over seven years after military retirement before assuming office. Korea should adopt a similar approach to strengthen civilian control, starting with resolving conflicts between the parties to jointly ensure the fair appointment of a civilian Minister of National Defense.

As the saying goes, the sun will shine again after the storm. The political commotion in Korea has led to societal divides, weakened investor confidence, and risked diplomatic relations and national security. However, steadfast and collective efforts are being made to disperse the storm. Thus, Kingos should hope that Korea can reinvigorate itself as a better country for the future.