SEOUL, April 16 (UPI) -- The victory of the pro-government party in South Korea's parliamentary election will pave the way for President Roh Moo-hyun to speed up his long-touted economic reform focused on overhauling the country's family-run conglomerates.
Roh's presidency has been in limbo since the opposition-controlled parliament passed the impeachment bill last month for violating election laws and incompetence. But the impressive show of public support in Thursday's general elections is widely expected to work in Roh's favor moving forward, assuming he can hold on to power. The national court will be required to rule on whether to unseat him, or throw out his impeachment and restore his powers before mid-September.
In the polls, the Uri Party, a group of reformists loyal to Roh, grabbed 152 seats, two seats more than the simple majority of 150 in the 299-member National Assembly, breaking the conservatives' four-decade grip on parliament. The outcome was a dramatic victory for the party that had just 49 seats in the outgoing chamber.
Resounding support for the Unir Party is expected to restore the embattled leader's public mandate because the elections were seen as a referendum on the opposition-led impeachment of the reformist president.
With the sweeping victory of the Uri Party, a flag-bearer of progressive forces, the left-leaning Democratic Labor Party secured an impressive foothold for the first time in the National Assembly with 10 seats with the backing of workers and farmers. With a parliamentary majority, they are set to raise its voice for drastic reform packages for the next four years.
Until now, the three opposition parties that dominated the parliament had checked Roh' attempts to seek drastic reforms to overhaul the scandals-tainted business practices and take pro-labor policies. But with the new balance of power in the National Assembly, Roh is expected to aggressively push for reform packages to jump-start the Korean economy.
Specifically, Roh has placed top policy priority on the fair distribution of wealth and tough reforms of family-run business empires, or chabol. Roh, a labor lawyer, also favors pro-labor policy, which critics say has triggered fierce labor protests since he took office early last year.
But businesses leaders and some economists express concerns that drastic reforms and pro-labor policies may hurt the fragile business and investment climate which has been already worsened in the wake of a prolonged slump in private consumption.
"The Uri Party had pledged to seek business-friendly policies during the election campaigns to woo votes, but it favors wealth redistribution over economic growth," said Lee Chang-yong, an economics professor at Seoul National University.
"Drastic reforms and pro-labor policies would pose a big burden on big businesses," said Lee Soo-hee, a researcher at the Korea Economic Research Institute, a private think tank.
Lee and other analysts also voiced concerns that the entry of the nascent Democratic Labor Party to the Assembly may lead to a string of labor-related problems. The labor party is supported by the militant Korean Confederation of Trade Unions. The party has forwarded such measures as taxes on the rich and greater participation by employees in management.
The party's 10 lawmakers in the incoming parliament include three farmer activists who oppose free trade agreements and the opening of the country's highly protected agricultural markets.
The Federation of Korean Industries, the country's largest business lobby, raised concerns about the possible outbreak of labor rows with the unprecedented entry of a "progressive" party into the National Assembly. "I expect the government will take appropriate measures to build a nation suitable for doing business," said FKI vice president Lee Kyu-hwang,
"President Roh and his ruling party are urged to seek bipartisan consensus when they push for any major policies," said Prof. Kim Kyung-hwan of Sogang University. "But otherwise, it would further heighten political uncertainty that would threaten the economic recovery," he said.
Partly reflecting investors' concerns, South Korea's main stock index lost 1.9 percent on Friday, though international rating agencies said they do not plan to act on South Korea's rating based on the outcome of the elections.
In an effort to ease business concerns, Finance and Economy Minister Lee Hun-jai ruled out any changes in the government's economic policies, saying the emphasis will remain focused on investment, job creation and market stability.
In a press conference on Friday, Lee said the government would spur corporate investment and consumer spending to achieve its target of doubling economic growth. "The government will implement policies to accelerate a rise in investment and domestic demand," he said.
The government is also preparing for an international roadshow this month to assure foreign investors and credit rating agencies that the South Korean economic recovery is on track. The government team, led by Minister Lee will stop in Hong Kong on April 23, London on April 26 and New York for two days from April 27.
