Breakthrough in North Korea issue, economic revival to be major challenges for Moon in 2021

President Moon Jae-in speaks during a Cabinet meeting at Cheong Wa Dae, Tuesday. Yonhap

By Do Je-hae

• Published Dec 31, 2020 3:11 PM KST
• Updated Jan 2, 2021 2:31 AM KST

By Do Je-hae, Jung Da-min

The first half of 2021 is expected to be crucial for President Moon Jae-in as the six-month period is the only time he has left to make any big policy moves on diplomacy, national security, the economy and other political issues before the nation becomes engrossed in the run up to the next presidential election which will take place in March 2022.

So aside from the COVID-19 pandemic, one of the biggest remaining challenges for the Moon administration is how to establish achievements in what is virtually its final year, as the incumbent resident is almost certain to become a lame duck not far down the road.

In diplomacy and national security, there is little doubt that Moon wants to make his “peace process” on the Korean Peninsula one of his most memorable legacies. But many people feel, despite some shining moments, such as his summit with North Korean leader Kim Jong-un in Pyongyang in September 2018, he has not made any fundamental headway in his push for peace in terms of inter-Korean relations and North Korea's denuclearization.

In the New Year Moon is expected to make all-out efforts to resuscitate talks between the two Koreas as well as between the U.S. and North Korea.

“The Joe Biden administration will be inaugurated in January. As you well know, U.S.-North Korea talks as well as inter-Korean dialogue are now in a state of stagnation,” Moon said during the Dec. 22 meeting with the five highest national leaders at Cheong Wa Dae. “But if we manage the situation well so that it doesn't get worse, and if there isn't a provocation from the North until the inauguration of the Biden administration, we see the new U.S. administration as a momentum for restarting North Korea-U.S. dialogue and inter-Korean dialogue. I'll do my best to make these happen.”

But U.S. President-elect Biden's rigid stance on North Korea is feared to present challenges for Moon's engagement-centric North Korea policy. Therefore, experts highlight the need for solid coordination between the allies on North Korea.

“As allies, the Americans and South Koreans should keep one another informed of their positions and priorities while taking a realistic view of the chances of getting into talks with the North and finally working out a deal,” Donald Kirk, a columnist on Korean Peninsula affairs, told The Korea Times. “Both the U.S. and South Korea should stand fast against concessions in which the U.S. and ROK give up sanctions while the North avoids any commitment on its nukes and missiles and generally scales down the level of military confrontation.”

“U.S. and South Korean national security officials need to coordinate an alliance response to North Korea's newly unveiled ICBM and upgraded SLBM because Pyongyang's next move may be to test them,” Leif-Eric Easley, a professor at Ewha University in Seoul, told The Korea Times

Moon is also advised not to stick too much to his conviction of South Korea being in the “driver's seat” on Korean Peninsula affairs. He needs to take into consideration that the key stakeholders such as the U.S. and China are not in a position to give priority to the Korean Peninsula, on top of the fact that these countries will no longer be interested in working with an outgoing leader, according to some experts.

“Next year, the president will be a lame duck anyway. Under these circumstances, neighboring countries can't afford to give political support to a president whose term is on the decline, and they will shun doing anything meaningful with him,” a senior researcher at a state-run foreign policy institute told The Korea Times on condition of anonymity. “China is already interested in analyzing the presidential hopefuls. Unlike South Korea, big powers such as the U.S. and China always prepare their diplomatic strategies from a very long perspective.”

Economy key domestic point

Political watchers widely agree that improving the quality of life of the people in the coronavirus-hit economy is one of the major challenges domestically for the Moon administration.

“There are two main challenges: the first is how the government could find a breakthrough in restoring people's economic situation after a series of policy failures in different sectors, including real estate, household debt and small businesses,” political commentator Park Sang-byoung said.

“The matter of welfare is not a matter of economics but of politics that should be solved through appropriate policies. … Issues related to people's financial situations and quality of life are entangled as policy failures by Moon and former Land Minister Kim Hyun-mee during the past three and a half years have led to the increase in household debt, with more young people overextending themselves with debt and trying to buy homes. The rising household debt has led to the decrease of consumption, creating difficulties for small business owners.”

Park said as economic difficulties will likely be at their peak in 2021, the Moon administration should first solve the matter before dealing with other political issues.

He also said the Moon administration should cooperate more with the ruling Democratic Party of Korea (DPK), which has a supermajority of 173 seats out of the 300-strong National Assembly, to minimize the lame-duck phenomenon during his remaining presidency until May 2022.

“The lame-duck phenomenon will not emerge before April's by-elections for the vacant posts of mayors and lawmakers. … After the by-elections, however, the eyes of the media and the public will be on candidates for the next presidential election to be conducted in March 2022,” Park said.

“If the Moon administration and the supermajority DPK cooperate well in terms of managing state affairs, with the DPK balancing between helping the Moon administration and promoting its presidential candidates, it could minimize lame-duck effects and this could be an achievement of the Moon government.”

Another political commentator Rhee Jong-hoon said, however, he sees a lower chance of the Moon administration making a turnaround this year, when its economic policies have already failed and the supermajority DPK has not succeeded in its role of holding the government in check having only said “yes” to every government policy.

“No one talks about the Moon administration's initial catchphrase of 'income-led growth' anymore as it has totally failed while the gap between the rich and the poor had been already widening even before the COVID-19 pandemic, which only deepened the existing problems,” Rhee said.

Rhee said the Moon administration has strived to revive the economy through new attempts such as the “Korean New Deal” program, but its focus was still on policies helping small business owners rather than investing in the leading businesses' innovation and research and development sectors, when the latter has a higher possibility to boost the country's long stagnating economy.

“Giving the COVID-19 disaster support funds in cash like 1 million won ($922) or 2 million won to small business owners is only a temporary relief measure, as it only helps marginalized companies, small business owners and self-employed people to survive for a slightly extended period of time,” Rhee said. “The Moon administration is urged to boldly invest in the innovation of the research and development sector but it is not doing so over fear of losing votes in the upcoming elections.”