This Month at PSPD

September 2021

We scrutinized the achievements and limitations of reformation Moon administration pulled up

The new government of 2017 that rose after the first impeachment in our constitutional history was asked to fulfill the tasks of the times: to restore democracy and rule of the people, establish democratization of the economy and the welfare state, bring peace to the Korean peninsula, and form a society that its citizens are safe in. The Moon administration called itself the “candlelight administration”, promised a society-wide reformation as governmental projects, and accepted many problems raised by the civil society. At the beginning of the administration, summits between North and the South, and DPRK and the U.S. took place, the top rate for corporate tax and income tax were raised, the minimum wage also took a hike in 2018, and there was also the installment of the Corruption Investigation Office for High-ranking Officials(CIO) and the adjustments of the authority to investigate, albeit their drawbacks.

However, there were also the society-wide controversies around the 2019 Prosecution reform and the nomination of the former Minister Cho Kuk, the defamation of the electoral system’s reform intention due to the satellite parties in the 21st general election, and the continued failure of the residential real estate policies. While there were no notable changes in the guarantee of the fundamental labor rights and the enhancements in the corporate governance structure, the dependency on the chaebol conglomerates increased by the priority placed on the revitalization of the business investment, and the vice-chairman Lee Jae-yong’s parole was recently granted. PSPD selected the following six as the needs of the times that were demanded when the Moon administration was first launched and conducted an evaluation on adequacy and performance on the governmental projects and other main policies.   

Political neutrality of the authority and the reinforcement of democratic control

Democratic reformation of the authority was one of the major reform projects of the Moon administration. It reflected a societal demand of severing ties of the agencies’ illegal acts of abusing their authority for the institution and protecting the ones in power rather than to protect people’s fundamental rights, and a need to reinforce democratic control over them.

PSPD summarizes the evaluation of the four years of the administration’s reformation as ‘the hypertrophy of the police, the state of prosecution and the National Intelligence service remaining undiminished, and meager Corruption Investigation Office for High-ranking Officials(CIO)’. We cannot deny the fact that there were some notable achievements, namely the establishment of the CIO as an independent investigation and production institution against the corruption of the high ranking officials, the prosecutorial reform, the rearrangements of the investigative power between the police and the prosecution, and the amendment of the National Intelligence Service Act. However, there were limitations. While the authorities of the police expanded, its growth was without a competent democratic control mechanism, which marks the reformation as more of a degeneration. As for the NIS, the transfer of the investigative rights was delayed for three years. In conclusion, the total quantity of the authorities from the agencies of power has increased in some aspects, and democratic control mechanisms over them have not been properly arranged. 

Housing stability of the working class and the improvement of the asset polarization

The Moon administration, when it first launched, didn’t set a clear direction for the taxation and finances for real estate that works as the core of residential real estate reformation nor did they present a detailed way to solve the asset polarization problem. Eventually in the middle to towards the end of the term, the administration reacted with large scale supply measures as well as the strengthening of real estate taxations, loan restrictions, and restrictions on reconstruction as well as redevelopments, but they were all after the housing prices skyrocketed, which lost them the trust in the policies.

There are some things the Moon administration worked on to stabilize the housing of the working class, through a raise of housing benefits and widening the recipients, and increase the supply of public rental housing, but in the case of the latter policy, the administration aimed to boost the accomplishments without a big increase of the budget, which resulted in a massive increase in the deposit-based lease while the construction of rental housing supply for the low-income families decreased. Housing Lease Protection Act was amended in 2020, but it holds the problem of not being able to fully guarantee the right of renewal claims the tenants hold by setting the renewal period for two years and restrict it to be exercised just once, but denying the renewal when up to the tenants’ lineal ascendants and descendants are primary residents. Moreover, it allowed for dual pricing to take place between the renewal contract and the new contract. Another limitation is the failure to amend the serious preferential treatments towards the registered social landlords.

Guaranteeing the rights of the vulnerable workers and forming a safe working environment

Although the Moon administration showed efforts at the beginning of the term by transitioning the non-regular workers in the public sector to regular positions, and significantly raising the minimum wage to resolve the deep-seated problem of the wage gap, it was hard to witness active work in the field. They presented meaningful projects regarding the non-regular works, but no specific policy enforcements other than the transitioning in the public sector could be found. By the same token, while the income-driven growth the government set forth requires various policies all throughout the industry as well as the increase in the minimum wage, there lacked specific plans except for the minimum wage increase, even which average annual increase rate did not amount to what was originally laid out.

There were meaningful changes due to the people’s demands to bring changes to the terrible reality of nearly 2,000 workers dying of industrial accidents, such as the complete revision of the Industrial Safety and Health Act and the enactment of the Serious Accidents Punishment Act, but both legislations were pulled back to a certain degree in the process in the National Assembly. Especially for the Serious Accidents Punishment Act, the government presented an enforcement ordinance that considerably retreated from the legislative purposes, which raises the doubt on whether the government has any willpower to stop the deaths from industrial accidents.

Strengthening social security and resolution of inequality

The Moon administration has been posing as an embracing welfare state as well as a government that undertakes responsibility for one’s life. Especially in the middle of the COVID-19 pandemic situation, the responsibility of the government stood out more in areas such as income security, public health care, and social services. Be that as it may, many projects were insufficiently pursued as a result.

The abolishment of the family support obligation rules that has been a long-standing wish of many was pursued in stages rather than in a complete form the government promised, and while the Social Services Facilities Act passed the relevant Committee in the National Assembly with retreated clauses, it is held back from the Assembly due to the opposing voices of the private institutions. Although the Moon administration self-praised the achievements of the Moon Care last August, on the fourth anniversary of the health insurance guarantee reinforcement policy, in reality, the coverage showed a slight increase and neither could it stop the balloon effect of the non-payment items. Adding on to that, many projects were either degenerated or deteriorated. The most representative example that worries us would be how the government is constantly lukewarm towards strengthening the public character of health care such as the new construction of public hospitals and medical human resource expansion, erstwhile actively pushing forward the commercialization policies of medical treatment. The roadmap for nationwide employment insurance that showed a will to encompass artists, workers from special high schools, and platform workers was significant, considering the long-term and phased plan to pursue the project, the feasibility seems doubtful.

Enhancing the management structure of the chaebol conglomerate and alleviating the economic concentration

The Moon administration set three pillars as the main economic policy: income-driven growth, a fair economy, and innovation growth. They showed some progress in the fair economy policy sector in the beginning, but as the term progressed, they showed a tendency to put innovation growth and alleviation of restrictions before others.

Especially in the major legislative process in the Commercial Law and the Fair Trade Act, the ruling party, the Democratic Party of Korea included contents that nullified the purpose of the amendment, which set a limit to the realization of actual chaebol reformation even though the legislation has been completed. Regarding the protection of middle to small merchants and the traditional markets, actively pursuing projects that are manageable at the government policy level and conducting an active investigation on unfair acts could be pointed out as worthwhile parts.

However, after the grant of pardon or parole to the vice-chairman of Samsung Electronics, Lee Jae-yong was continually brought up, the government eventually decided on parole on August 9th. This was a decision that directly goes against the pledge of the Moon administration of strictly enforcing laws towards economic crimes and one that privileges the leader of the chaebol.

Realization of peace on the Korean peninsula

The Moon administration that started in a situation where the inter-Korean relationship was aggravated while the nuclear and missile capabilities of DPRK were intensified, set the basic goals as the development in the inter-Korean relationship, denuclearization and actualization of a peace regime on the peninsula, reinforcement of the Korea-U.S. alliance and arms buildup. It attempted a bold approach, using the 2018 Pyeongchang winter Olympic games as an opportunity, stimulated to resume conversations between ROK and DPRK, DPRK and the U.S., which led to three turns of summits between the states. 

However, the hard-won agreements between ROK-DPRK and DPRK-U.S. could not step over the demands of denuclearization first from the U.S., and the sanctions against the DPRK. No concrete outcomes were possible while military training and arms buildup against DPRK was being continued. The Moon administration has been increasing the defense budget at an annual rate of 7% and pursued a “Korean Three-Axis System” only under a different name, which scheme readies pre-emptive strike and revenge punishments against DPRK while it made efforts for denuclearization and establishment of a peace regime. As for the Korea-U.S. military alliance, various pending issues such as the delay of return on the wartime operational control, stationing THAAD from the US forces in Korea, and the integration into the missile defense system of the U.S., excessive increases of the shared defense burden have not been treated with equality or rationality.

As can be seen from the description so far, we cannot deny the fact that the democracy of the Korean society has been operating more dynamically and the level of human rights has been enhanced from before, but the majority of the people are experiencing a bigger inequality between income and asset, and the powers of the institution and the economic entities outside the scope of the people’s control still stands. Two things are clear; reform tasks remain in this society, and the achievements and limitations of the Moon administration should be imprinted to be contemplated and improved for future reform efforts to come.