All Quiet in the Blue House

South Korea's New President

All Quiet in the Blue House

September 2, 2013 | by YOUNG-SIM SONG

From the Sustainable Development Indicator's project of the Bertelsmann Stiftung

The Blue House in Seoul, seat of the South Korean president © Jirka Matousek/Flickr

The election of Park Geun-hye as South Korea’s first female president signaled a historic change of governance. Yet, after her first six months in office Ms. Park still needs to translate her words into deeds.

In the perception of many South Koreans it has been rather quiet lately in the Blue House, the official residence of the president located in Seoul. During the first six months of Park Geun-hye’s term of office the biggest event has been a trip to the United States to meet with President Barack Obama. And this trip ended in a disaster clouded by a scandal of sexual harassment.

It is not Ms. Park’s first time in the Blue House. She is the oldest daughter of Park Chung-hee who ruled South Korea as a military dictator from 1961 to 1979. She was born in 1952. After her mother was shot in 1974, she acted as the de facto First Lady. After her father’s death in 1979, Ms. Park stayed away from the public limelight for more than 20 years. In December 2012, the former party head of the major conservative party Saenuri-dang (New Frontier Party) – formerly Hannara-dang (Grand National Party) – was elected as president.

While Park Chung-hee had to fight starvation and try to build up an economy, people nowadays are more concerned with the distribution of wealth than with headline GDP figures. "The popular perception is of a successful country that is stricken with economic inequality, excessive power in the hands of the chaebol conglomerates (family-owned business conglomerates), and a lack of decent jobs for young graduates", writes the Economist after the inauguration on February 25, 2013.

Before the general’s daughter was elected as president she promised to fight these problems and expand the welfare state. She spoke of "a new era of happiness" for South Korea. When she was sworn in, Ms. Park also assured a tough stance on national security, saying that she would "not tolerate any action that threatens the lives of our people and the security of our nation".

The new president promises to reduce social inequality

On the economy, Ms. Park promised more focus on a "creative economy" based on "economic democratization" that would expand beyond existing markets and sectors. South Korea's economic growth has slowed, the population is rapidly aging, and demands for a fairer distribution of wealth are now being voiced.

Policies will be brought in to help small and medium-sized enterprises flourish, Ms. Park said. Unfair practices will be abandoned and misguided habits of the past rectified. She also promised a "clean, transparent and competent government".

According to the South Korea report of the new Asia study by the Bertelsmann Foundation’s Sustainable Governance Indicators (SGI) project, Ms. Park has been "very smart in asserting new political goals such as welfare state policies as a means of attracting low-income voters". Opposition parties have been caught off guard by these political shifts.

The SGI report shows that the former government has had little success in persuading the huge export-oriented business conglomerates to engage in corporate social responsibility, support small suppliers and leave certain markets to small companies. It remains uncertain, however, if the new president will prove able to act more forcefully in limiting economic concentration and facilitating greater transparency and accountability among the primarily family-owned companies through new laws and regulations.

Moreover, given that Ms. Park is the first female president in the history of South Korea it will also be interesting to see whether she will push for greater women rights. Discrimination is a big problem in South Korea and women remain underrepresented in almost all important sectors, according the SGI study. The wage gap between men and women is on average 38 per cent, the biggest in the OECD.

"More participation of women in the economy is a core engine for the nation’s growth," Park Geun-hye said on a campaign in July 2012. A work-life balance is no longer just an issue for women but the entire country. However,ensuring an easier combination of parenting and participating in the labor market might not be a heartfelt desire for a president who is 61 years old, unmarried and has no children.

South Koreans are divided over their new president

The SGI South Korea report also indicates that it might be a cause for concern that Ms. Park has not clearly distanced herself from the policies of her father. For many South Koreans this is a controversial issue.

Some people acknowledge the achievements of Park Chung-hee as the leader of the "miracle on the Han River". This refers to South Korea's rapid economic growth after World War II which brought racy industrialization, technological achievements, a boom in education as well as large improvements in living standards and fast modernization. Park Chung-hee had no choice back in those days, many older South Koreans say. He had to fight poverty and starvation first. Others – especially people who have been affected by the strict regime and military suppression – fiercely contest this claim.

But in the eyes of many South Koreans today – supporters and opponents – not much has happened in the first six months of Ms. Park’s presidency. She keeps on saying that she will fabricate a "creative economy", but what this really means hasn’t even been defined yet clearly. Nobody even knows what is meant by "creative economy".

Thus far, the issue many ordinary citizens in South Korea associate most with their new president is her first trip abroad, which ended in a disaster. Ms. Park fired her spokesman Yoon Chang-jung amid allegations that he sexually harassed a young South Korean woman. Later the senior secretary for public relations to the president took responsibility for the incident and resigned. South Koreans were shocked and hardly anybody paid attention to the outcome of the state visit.

Young-Sim Song, a business school graduate, is a journalist for economic affairs covering the European power and gas markets. She lives in Frankfurt am Main, Germany.