South Korean President Yoon Suk Yeol, head of the People Power Party (“PPP”), declared a short-lived martial law situation at 22-30 hrs Seoul time on 3 December 2024.

The decision went into force under a decree issued by Army Chief of Staff General Park An-su. The South Korean constitution allows for imposition of martial law, in the event of military necessity, or when public safety requires it, amongst other conditions.

The decision did not relate to military incursions, but came in response to extreme political pressure on Yoon himself, including an ongoing corruption investigation involving his wife, and the opposition Democratic Party’s continuing success in blocking legislation – most notably the budget law. Yoon’s popularity polling was already at a record low.

President Yoon alleged that the action was necessary, in order to protect the country against North Korea aggression, and to neutralise anti-state elements. His stance aimed at shoring up support from older, and more security-minded, citizens. The military and police initially backed the president; the police issued their second highest emergency response order.

Soldiers and police then sought to block access to the parliament, but protesters quickly gathered outside, and signs emerged that Yoon’s initiative was faltering. South Korea has a dark history of coups and massacres of protesters, which still affects people’s emotive responses to this day. Yoon’s actions touched a button.

Ultimately, a medley of politicians, such as the head of Yoon’s own party, the PPP, Han Dong-hoon, and the PPP Mayor of Seoul, as well as the head of the Democratic Party, Lee Jae-myung, condemned the move. The legislature then organised a vote in opposition, which passed the 300-strong chamber with 190 votes in support of the motion.

Within six hours, and in the face of parliamentary and street-side opposition, Yoon had reversed the declaration of martial law. His future as president is now seen to be limited, and an impeachment process, or imminent resignation, can be anticipated.

The consequences

Yoon’s miscalculation will have longer-term political consequences. The PPP government will likely fall, and any post-Yoon government will probably be left-leaning, and less pro-US, given the current Democratic Party ascendancy.

Yoon’s move also has the potential to cause a great deal of economic and financial disruption. South Korea is the fourth largest economy in Asia, and the 12th largest in the world, with a GDP of USD1.8 trillion. However, the markets seem to have held their footing thus far.

The Korean peninsula

Worse, this chaotic situation comes amidst heightened tensions with North Korea. Pyongyang has deployed combat troops to Ukraine, and had destroyed road links between the two Koreas.

Questions have arisen as to whether Russia is providing oil or specialist support for nuclear or missile programmes in exchange, so strengthening North Korea – and altering the balance of forces on the peninsula.

Pyongyang may now view instability in South Korea as an opportunity to act in a provocative fashion, especially during the interregnum before President-elect Trump takes over in January 2025.

In the longer term, a leftist government in Seoul may loosen relations between Japan, South Korea and the USA – to the strategic benefit of North Korea and the People’s Republic of China (“PRC”).

Wider security issues

The move may also affect the US-led security order in other ways.

Seoul had been considering the provision of artillery and other support to Ukraine, or alternatively to North Atlantic Treaty Organisation (“NATO”) states. A new government, mindful that providing military aid to Ukraine is very unpopular in some quarters, may now refrain from, or at least rein in, such generosity.

Of further note is that Seoul is part of the regional alliance structure, and the US has 28,500 troops deployed in Korea. Instability in South Korea will thus affect decision-making in the US, Japan and Taiwan.

In that context, Taiwan’s president Lai Ching-te is currently in the South Pacific, on a tour of Taiwan’s few remaining allies. His travels, including a stop in Hawaii, have angered the PRC.

Lai is due to return on Friday 6 December 2024, and the People’s Liberation Army (“PLA”) may launch large-scale exercises around Taiwan this weekend, in response.

Commentators have already pointed to a large number of Chinese vessels deployed around the island. Russian forces may join the exercises; a Russian submarine was sighted in the South China Sea.

Conclusion

In short, Yoon’s erratic decision has caused a substantial amount of damage, both domestically and in broader terms – at a time of great strain in the US-led security order.

This situation poses potential risks to some businesses.

SVA stands ready to be of assistance at these unsettled times.

SVA

SVA (www.stevevickersassociates.com) is a specialist risk mitigation, corporate intelligence and risk consulting company. The firm serves financial institutions, private equity funds, corporations, high net-worth individuals, and insurance companies and underwriters around the world.

SVA has three core lines of business, which are: Business Intelligence and Political Risk; Corporate Investigations; and Special Risk.

SVA also has a dedicated crisis management team which, for our retained clients, stands ready to assist companies during crisis situations.

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