By Eric Vandenbroeck and co-workers

The South Korea Situation

The last time South Korea hit the headlines was during the Asian financial crisis of 1997 and 1998 with South Korea’s first serious setback as a major new economy. South Korea was forced to appeal to the International Monetary Fund for $67 billion worth of loans.

Whereby also early this morning the Bank of Korea expanded the scope of market operations on Wednesday as it ramps up attempts to maintain liquidity and market stability amid the country’s ongoing political crisis.

And came in the wake of President Yoon Suk Yeol Declaring Martial Law:

Senior aides to President Yoon Suk Yeol, including his chief of staff, resigned en masse Wednesday morning, citing the presidential office. Yoon canceled his scheduled public appearances for the day, Korea JoongAng Daily reported.

The leader of South Korea’s ruling People Power Party, Han Dong-hoon, furthermore has called for Defense Minister Kim Yong-hyun to be fired, Reuters reported, after a Defense Ministry official told local media that Kim had suggested imposing martial law on President Yoon Suk Yeol

Given the current martial law backlash, the ruling party leaders and presidential advisers held an emergency meeting the result (at the time of writing) is still to be announced. What is clear so far is that President Yoon Suk Yeol is facing pressure to resign after abandoning an attempt to impose martial law and purge the country of “anti-state forces”.

The main opposition Democratic Party called for Yoon, who has been in office since 2022, to resign or face impeachment.

“It was clearly revealed to the entire nation that President Yoon could no longer run the country normally. He should step down," senior DP member of parliament Park Chan-dae said in a statement.

Six South Korean opposition parties said they would submit Yoon's impeachment bill on Wednesday, the Democratic Party said in a message to reporters, with voting to take place on Friday or Saturday.

The leader of Yoon's ruling People Power Party called for Defence Minister Kim Yong-hyun to be fired and the entire cabinet to resign.

The protest which started during the daytime continued into the night when troops were sent against the protesters.

Amid a "violent" confrontation, in the early evening, the muzzle of the martial law army's guns pointed at the Spokesperson for the Chairman of the Public Relations and Communication Committee of the Democratic Party of Korea, Seoul Metropolitan Government:

The previous martial law was last declared after a coup in 1980, that installed a military dictatorship.

After pro-democracy activists, mostly university students, protested in the city of Gwangju, special forces responded violently, killing about 200 people with machine guns and clubs.

More than four decades later, South Korean President Yoon Suk Yeol has declared martial law once more, this time accusing the opposition party of engaging in “anti-state” activities in alignment with North Korea.

Yoon’s extraordinary move has shocked many South Koreans and dredged up painful memories of how military rule was used in the country before it turned to democracy in the late 1980s.

Armed South Korean government martial law troops in Gwangju, South Korea, on May 27, 1980.

In a cabinet meeting before South Korean President Yoon Suk Yeol declared martial law, Defense Minister Kim Yong-hyun urged him to do so, according to a senior U.S. official, who spoke anonymously because of the matter’s sensitivity. A Ministry of National Defense official confirmed to local media Wednesday that Kim had made the suggestion.

An interview with a market analyst on the BBC News' Business Today show has taken an unexpected personal turn.

Before focusing on the market impact of the political turmoil in South Korea, Jung In Yun from Fibonacci Asset Management Global described how he was woken in the middle of the night by his wife who called and asked "What if North Korea attacked us?" and "What if there is a civil war?"

Jung went on to describe what was a "very emotional night for many, or most, Koreans" as they turned to platforms like YouTube to watch live as soldiers entered the country's National Assembly.

He also described a generalized sense of relief when news emerged that the martial law declaration had been lifted. Instead of preparing for the worst-case scenarios, Jung said this became a "buy the dip" moment - an expression used by investors to describe the opportunity to purchase assets that have temporarily fallen in value.

At the time of writing President Yoon Suk Yeol’s (possibly under pressure from the US which has a large military presence in South Korea) now suddenly announced his decision to rescind martial law.

Nevertheless, Prime Minister Han Duck-soo has pledged to serve the people “until the very end” following a slew of resignations and growing calls for the president to resign.

 

What now?

Yoon has drawn ire from politicians on both sides, as hastily-gathered lawmakers - including some from Yoon’s party - voted to lift martial law on Tuesday night. The opposition Democratic Party is trying to impeach Yoon, and even Yoon’s own party leadership has demanded the president’s withdrawal from the party. Yoon’s senior aides offered to resign en masse on Wednesday, Yonhap news agency reported.

Opposition leader Lee is projecting optimism, telling reporters that Yoon’s “illegal declaration of martial law” is a “decisive opportunity to break the vicious cycle and return to normal society”.

The repercussions of Tuesday night are set to ripple beyond South Korea’s borders. Yoon’s announcement has rattled South Korea's allies. Officials in the US, a key ally, said they were caught off guard by Yoon’s announcement, and are urging South Korea to resolve the crisis “by the rule of law”. Japan says that it is monitoring the situation in South Korea with “exceptional and serious concerns”.

It is unclear what Yoon plans to do. He has yet to make a public appearance since the fiasco.

“He was increasingly unpopular for the way he has dealt with the problems that have been raised with his conduct and the conduct of the first lady,” former South Korean foreign minister Kang Kyung-wha told the BBC Newsday program. “The ball is in the president’s court to find a way out of this corner that he has put himself in.”

But no matter how Yoon chooses to play it, his botched martial law declaration may already be shaping up to be the last straw that breaks his shaky presidency.

Somewhat confused about what to do with their trusted ally, Secretary of State Antony Blinken welcomed South Korean President Yoon Suk Yeol’s decision to rescind martial law, saying the United States “has watched closely developments over the last 24 hours” and expects political disagreements to be “resolved peacefully.” Blinken reaffirmed the U.S.-South Korea alliance, which he said is based on “shared principles of democracy and the rule of law.”

A night of political upheaval in South Korea has upended stability in a key democratic US ally, sending shock waves through the region and (and hopefully Biden will watch this) Washington at a moment of acute global tension.

The UK Foreign Office has issued an alert for travelers following the declaration of martial law in South Korea on Tuesday (December 3).

Updated FCDO advice says: “We are aware of the developing situation following a declaration of martial law in South Korea. This has now been lifted.

“Follow the advice of local authorities and avoid large public gatherings. Demonstrations are expected in the areas around Gwanghwamun, the Presidential Office (Samgakji), and the National Assembly (Yeouido).”

 

What is Next for Yoon?

On Wednesday, six opposition parties filed an impeachment motion, which will go before parliament on Saturday at around 7:00 p.m.

If it passes, Yoon will be suspended pending a verdict by the Constitutional Court, which has to rule within 180 days. In the meantime, the prime minister would be acting president.

If the president is impeached, a new presidential election must be held within 60 days.

 

Will the Impeachment Motion Pass?

The opposition block holds 192 seats in the 300-member National Assembly, so the motion needs only eight defections from the president’s People Power Party (PPP) for the necessary two-thirds majority.

However, on Thursday the head of the PPP said that while he had demanded Yoon leave the party over his “unconstitutional martial law,” he would block the impeachment motion.

“All 108 lawmakers of the People Power Party will stay united to reject the president’s impeachment,” party floor leader Choo Kyung-ho said.

But whether they WILL all toe the line—in particular the 18 PPP lawmakers who voted against martial law—remains to be seen.

 

What About Legal Proceedings?

Even if Yoon, who has gone to ground since the early hours of Wednesday, avoids impeachment, the 63-year-old could still face legal problems.

Police are investigating him for “insurrection,” a crime which is not covered by presidential immunity and can carry the death penalty.

 

 

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