{"id":2202385,"date":"2023-09-29T17:00:20","date_gmt":"2023-09-29T08:00:20","guid":{"rendered":"https:\/\/koreapro.org\/?p=2202385"},"modified":"2023-10-02T18:13:08","modified_gmt":"2023-10-02T09:13:08","slug":"yoons-budget-shifts-south-koreas-economic-strategy-amid-political-tensions","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/09\/yoons-budget-shifts-south-koreas-economic-strategy-amid-political-tensions\/","title":{"rendered":"Yoon’s budget shifts South Korea\u2019s economic strategy amid political tensions"},"content":{"rendered":"
Ahead of next year\u2019s legislative elections scheduled for April 10, the Yoon Suk-yeol administration has unveiled its 2024 budget proposal, stepping into a charged political arena.\u00a0<\/span><\/p>\n The ruling People Power Party (PPP) is strategically positioning itself against the dominant Democratic Party (DP) in the National Assembly. With both parties separated by a <\/span>razor-thin margin<\/span><\/a> in public support \u2014 PPP at 33% and DP at 32% \u2014 the budget\u2019s details and implications are likely to become central to their electoral campaigns.<\/span><\/p>\n South Korea finds itself at an economic crossroads, with major global institutions predicting modest growth of around <\/span>1.5%<\/span><\/a>. Against this backdrop, the budget\u2019s conservative approach is notable and potentially controversial. The smallest spending increase since 2005, coupled with a measured 0.6% rise in government debt, signifies a sharp pivot from the Moon Jae-in era\u2019s expansive fiscal policies.<\/span><\/p>\n By <\/span>scaling back subsidies<\/span><\/a>, the Yoon administration signals its commitment to a more conservative economic philosophy, even as the DP <\/span>argues<\/span><\/a> for preserving existing support measures and more aggressive economic interventions during such challenging times.<\/span><\/p>\n While the administration might believe that a restrained fiscal approach will address concerns about the long-term health of the economy, it remains to be seen if this budgetary stance will translate into electoral success for the PPP.<\/span><\/p>\n TARGETING ELDERLY VOTE<\/b><\/p>\n The 2024 budget is aimed squarely at seniors, a traditionally conservative voting group that Yoon has been actively courting. Their support was evident in the previous presidential election when exit polls suggested Yoon secured approximately <\/span>67%<\/span><\/a> of voters over the age of 65. With the number of senior citizens recently exceeding 10 million, their electoral importance cannot be overstated.<\/span><\/p>\n In response to this demographic trend, the government plans to introduce <\/span>147,000 new job opportunities<\/span><\/a>, ensuring 10.3% of South Korean seniors can work in social service roles. The proposed remuneration for these jobs is set to double, depending on the nature of their responsibilities.<\/span><\/p>\n South Korea\u2019s challenge lies in its elderly poverty rate: at <\/span>40.4%<\/span><\/a>, it\u2019s the highest among Organization for Economic Co-operation and Development nations. Further, 34.9% of Koreans aged 65 and older are still in employment, often settling for low-paying, part-time roles.<\/span><\/p>\n Data from Dec. 2022 shows that 67.5% of Koreans in this age bracket benefit from a <\/span>basic pension<\/span><\/a>, a welfare scheme distinct from <\/span>old-age pension<\/span><\/a>. A basic pension aids elderly individuals within the lower 70% income tier. During his campaign, Yoon expressed intentions to increase these payouts for single-person households.<\/span><\/p>\n However, there\u2019s a monetary gap. The <\/span>average pension<\/span><\/a> from the National Pension Service stands at about $415 (560,000 won) per month, while the <\/span>minimum cost of living<\/span><\/a> for a single individual is estimated to be around $1,480 (2 million won). This disparity suggests that even those receiving both old-age pension and basic pension may struggle financially, reinforcing the necessity for post-retirement employment.<\/span><\/p>\n In his first New Year\u2019s address, Yoon emphasized the need for urgent <\/span>reforms<\/span><\/a> in labor, education and pensions. He articulated concerns over the looming <\/span>pension deficit<\/span><\/a> threatening the sustainability of the pension system. Projections indicate that South Korea\u2019s national pension could be <\/span>depleted by 2055<\/span><\/a>, pushing the country toward a pay-as-you-go system.<\/span><\/p>\n While the ROK Ministry of Health and Welfare is crafting a pension reform strategy, early proposals have faced <\/span>backlash<\/span><\/a> for suggesting higher premiums and postponed payouts. The detailed plan is anticipated to be submitted to the National Assembly in the coming month.<\/span><\/p>\n