By Kim Jae-kyoung
SINGAPORE — The decision to uphold the impeachment of President Park Geun-hye will have a positive impact on Korea and its economy, according to foreign experts Friday.
They said the decision will open the door for the country to move forward and provide an impetus for financial markets and the economy as it will remove political and economic uncertainty.
The positive views came after all eight judges of South Korea’s Constitutional Court voted to remove Park, the country’s first female president, over an influence-peddling and graft scandal that has ensnared Samsung, the country’s largest conglomerate.
She is the first democratically elected president to be forced to leave office. With the impeachment decision, a presidential election will be held within 60 days, as required by law.
“This is a positive step.It clears uncertainty and charts a path forward. Markets will like it,” independent economist Andy Xie told The Korea Times. He is the former Asia chief economist at Morgan Stanley.
“More importantly, it deters future presidents from doing the same thing. Corruption is the most important factor that makes countries poor. Deterring corruption is a necessary condition for any country to become an advanced economy.”
Alicia Garcia-Herrero, chief Asia-Pacific economist at Natixis, echoed this view, expecting the decision to bring an end to ongoing political and economic turmoil.
“The impeachment paves the way for a presidential election,” she said. “Markets are breathing a sigh of relief that hopefully this period of paralysis is coming to an end soon for Korea.
“Much of the long-standing issues for Korea have been at a standstill due to the political scandal and the hope of having a new leader brings back prospects of reforms and progress.”
Moody’s Analytics economist Emily Dabbs expects the decision will provide a boost for consumer sentiment.
“The impeachment should provide a much-needed boost to consumer sentiment, which plunged in late 2016 as the scandal unfolded,” she said.
“A resolution to the ongoing saga does start to provide some semi-balance of normality, which will support investment and hiring decisions.”
The analysts expect the decision will also give momentum for the country to speed up reform and tackle structural challenges.
Dabbs said Korean policymakers have been in a state of uncertainty since the National Assembly voted for the impeachment in December, which left reform policies on hold.
Moody’s Investors Service said: “The conclusion of the impeachment process removes one important element of political uncertainty, allowing a new president to come in and focus on formulating reforms that address Korea’s structural challenges.”
The analysts stressed that it is crucial for Koreans to choose a strong leader to keep Asia’s fourth-largest economy going forward.
“At this time, the only thing that can be done is to wait for the election and the decision of the Korean voters,” Jeffrey Jones, former chairman of the American Chamber of Commerce in Korea, said. He is an international lawyer at Kim & Chang.
“Hopefully, a strong, wise and decisive president will be elected who will work tirelessly to improve the economy and who will lead by example and persuasion.”