|A supporter of President Park Geun-hye holds up her portrait during a rally opposing her impeachment in Seoul, Friday. In a historic ruling, the Constitutional Court formally removed the impeached president from office over a corruption scandal that has plunged the country into political turmoil, worsening an already-serious national divide and leading to calls for sweeping reforms. / AP-Yonhap|
By Park Hyong-ki
The confirmation of the impeachment of President Park Geun-hye will have a limited effect on the Korean economy, analysts said Friday.
Hopes are high that the Constitutional Court’s ruling will ease uncertainty and gradually revive consumer and investor confidence.
The impeachment and political scandal, unfortunately, left behind greater division and disparity among the people — between the old and young; conservatives and progressives; and the rich and the poor.
“We are seeing the division between rich and poor, and young and old widening. Along with external factors, the division will affect the real economy more than the impeachment ruling,” said Kim Doo-un, an economist at Hana Financial Investment.
The U.S. deadline for its federal debt ceiling extension is March 15.
These negative external factors could weigh more on the economy than the presidential impeachment, the analyst said.
Independent economist Chu Jin-hyung agreed that the division will make it more difficult for economic reform.
“The parliamentary system here already makes it difficult to pass bills. And the division will make it even more difficult as there will likely be more infighting. The economy will not be much different. The impeachment is unlikely to change it for the better in the short run,” Chu said.
Also, the impeachment left behind a leadership vacuum.
“Government policy-making had reached a state of paralysis due to the mounting political uncertainty as the political crisis around Park escalated,” said Rajiv Biswas, an economist at IHS Global Insight.
“The leadership vacuum following the impeachment has left Korea economically vulnerable,” said Prof. Yun Chang-hyun, an economist at the University of Seoul.
Yun added that one thing that came out favorably from the impeachment and the special prosecution was that Samsung Group decided to change by having its subsidiaries and affiliates independently manage their businesses without central control.
This comes after Samsung Electronics Vice Chairman Lee Jae-yong was indicted on bribery charges linked to Park and her close associate Choi Soon-sil.
Following the impeachment, Korea has 60 days to elect its new president.