Geopolitical Report ISSN 2785-2598 Volume 50 Issue 10
Author: Riccardo Rossi
Executive Summary
On December 3rd, 2024, South Korean President Yoon Suk-Yeol declared martial law, citing threats to democratic institutions. This unprecedented action caused a major political and institutional crisis, leading to Yoon’s impeachment and arrest. The instability has raised concerns among key global actors, including the United States, the European Union, China, and Japan.
This crisis has already affected South Korea’s economic outlook, with downgraded growth projections and diminished foreign investment attractiveness. Given the potential for heightened tensions with North Korea, the situation presents a serious geostrategic threat. The power vacuum and ongoing political turbulence could lead to greater instability on the Korean Peninsula, with implications for global security and trade.
Background Information
The crisis stems from Yoon Suk-Yeol’s imposition of martial law on December 3rd, 2024. Governed by Article 77 of the South Korean Constitution, martial law grants the president extraordinary powers during periods of war or severe threats to national security. Yoon accused the opposition Democratic Party of collusion with North Korea and undermining democratic institutions.
Following the declaration, the military occupied the National Assembly, escalating tensions with opposition lawmakers attempting to repeal martial law. A failed parliamentary vote ended martial law, yet it spurred a series of constitutional and political upheavals. Key developments included Yoon’s impeachment, a subsequent leadership crisis, and legal proceedings against Yoon for alleged corruption and high treason.
Key Developments
- Impeachment of Yoon Suk-Yeol: On December 14th, 2024, the National Assembly passed an impeachment motion with over two-thirds majority, dismissing Yoon and transferring authority to Prime Minister Han Duck-soo.
- Impeachment of Han Duck-soo: On December 24th, 2024, the Democratic Party started impeachment proceedings against Han for opposing investigations into Yoon. Political polarisation intensified when Choi Sang-mok replaced Han on December 27th, 2024.
- Judiciary Influence: On December 31st, 2024, Choi appointed two Constitutional Court judges, sparking criticism from both ruling and opposition factions. The court must decide on Yoon’s impeachment by mid-2025.
- Detention of Yoon Suk-Yeol: On January 15th, 2025, the Corruption Investigation Office for High-Ranking Officials arrested Yoon. His refusal to cooperate with investigations has prolonged judicial processes.
- Economic Repercussions: South Korea’s central bank reduced its 2025 growth forecast to 1.6–1.7%, citing diminished foreign direct investment and reduced export profitability, especially with China.
Analysis and Implications
The crisis underscores significant challenges to South Korea’s political and institutional resilience. The prolonged instability may lead to both immediate and long-term economic and geostrategic consequences:
Economic Impact
- South Korea’s economic growth is already affected, with foreign investors wary of the unstable political climate. The downgraded growth forecast and reduced export volumes—particularly with China—highlight vulnerabilities in the industrial and trade sectors.
- Persistent political uncertainty may deter capital inflows into Seoul’s industrial-financial system, while export-driven sectors face heightened challenges amid weakening Chinese demand.
Geostrategic Ramifications
- North Korea might use this crisis as an opportunity to ramp up military exercises, thus threatening the stability of the region. Pyongyang’s actions, coupled with South Korea’s leadership vacuum, could cause heightened US-ROK military readiness.
- China’s role will be pivotal. Beijing may leverage the situation to advocate for its “double freeze” doctrine, pushing for a mutual cessation of US-ROK military exercises and North Korean provocations.
- The crisis undermines trilateral security cooperation among South Korea, Japan, and the United States, thereby encouraging regional actors, such as North Korea and China, to challenge the established order.
Institutional Integrity
- The ongoing impeachment processes and the Constitutional Court’s eventual ruling will test the integrity of South Korea’s democratic framework. Failure to stabilise governance risks eroding public trust in state institutions and undermining South Korea’s international standing.
Conclusion and Recommendations
South Korea’s political crisis demands close monitoring, given its economic and geostrategic implications. Policymakers should consider:
- Strengthen Diplomatic Engagement: Encourage regional dialogue involving the US, China, and other stakeholders to address potential escalations on the Korean Peninsula.
- Economic Stabilisation Measures: Seoul must implement fiscal policies to reassure investors and mitigate economic fallout, including incentives for foreign direct investment and trade diversification.
- Enhance Military Coordination: Strengthen US-ROK-Japan military cooperation to deter North Korean provocations while balancing diplomatic efforts with China.
- Institutional Reforms: Promote transparency and accountability within South Korea’s political and judicial systems to restore public confidence and institutional stability.
The crisis represents a turning point for South Korea’s political and geopolitical trajectory. Failure to manage these challenges effectively could have cascading effects on regional security, economic performance, and international relations.
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