South Korea’s Martial Law Crisis and Political Fallout 

Current Situation

Declaration and Revocation of Martial Law by President Yoon

President Yoon Suk-yeol declared martial law on December 3, 2024, under Article 77 (1) of the Constitution, a step which further undermined his political capital following the ruling People Power Party’s (PPP) defeat in the General Elections and escalating allegations of stock manipulation against First Lady Kim Keon-hee. Yoon’s justification for martial law was “the eradication of pro-North Korean forces, restoration of administrative function disrupted by legislative dominance of the opposition Democratic Party of Korea (DPK) and safeguarding liberal democracy against anti-state subversion.” However, this vague reasoning was widely perceived as “political suicide,” further eroding President Yoon’s authority and crippling his administration’s ability to govern effectively.

Widespread Damage to the Conservative Bloc

The ruling PPP suffered significant political fallout as the president’s declaration of martial law, lacking clear justification, plunged the party into a crisis of legitimacy and accountability. The conservative bloc, including right-leaning media outlets that had supported President Yoon, faced reputational damage. In contrast, the DPK positioned itself as a defender of constitutional democracy, consolidating its political advantage and gaining momentum amid the fragmentation of the conservative base.

Submission of the Impeachment Motion

On December 4, under Article 65 of the South Korean Constitution, the National Assembly initiated impeachment proceedings against President Yoon for violations of the Constitution or other laws. If such a motion passes, the sitting president’s powers are suspended and the prime minister or other designated officials assume leadership of the Executive Branch. The impeachment process is further governed by Articles 65 and 111, and Article 130 of the National Assembly Act, and Article 48 of the Constitutional Court Act. Following passage in the National Assembly, the Constitutional Court determines whether to uphold the impeachment motion.

Rejection of the Impeachment Motion

On December 7, the impeachment motion against President Yoon was rejected due to insufficient participation in the National Assembly vote. Out of 300 members of the Assembly, a minimum of 200 must participate for the vote to proceed. While 192 seats are held by the DPK and allied opposition members, at least eight votes from PPP lawmakers were required to meet the threshold. Despite defections from three PPP lawmakers including Mr. Ahn Cheol-soo, Ms. Kim Yea-ji, and Mr. Kim Sang-wookI, only 195 legislators participated, resulting in the motion’s dismissal for failure to meet quorum.

Historical Context of Presidential Impeachments in South Korea

Presidential impeachments are typically viewed as significant political events in most countries. In recent South Korean political history, there have been two:

• First Impeachment Attempt: In 2004, President Roh Moo-hyun faced impeachment after expressing public support for the Uri Party (ruling social-liberal political party in South Korea from 2003 to 2007) ahead of the General Elections, violating the Election Commission Act. The National Assembly passed the impeachment motion with 193 votes in favor out of 195 cast. However, the Constitutional Court dismissed the motion, citing insufficient grounds for removal despite acknowledging legal violations.
• Second Impeachment Attempt: In December 2016, President Park Geun-hye was impeached over her involvement in the “Choi Soon-sil Scandal.” The motion passed the National Assembly with 234 out of 300 members voting in favor. In March 2017, the Constitutional Court unanimously upheld the impeachment, resulting in Park’s removal from office. A snap presidential election was subsequently held in May 2017. 

Prospects for South Korea’s Political Landscape 

Fallout from the Rejection of the Impeachment Motion

The rejection of the impeachment motion is expected to generate significant political aftershock, including public dissatisfaction and debates over the potential curtailment of presidential terms. The issue of President Yoon’s tenure is likely to become a pivotal turning point in South Korea’s political landscape.

President Yoon’s National Address on December 8, 2024

The key points highlighted in President Yoon’s national address on the morning of December 8 were:

• Apology for the Martial Law Crisis: President Yoon issued an apology to the public, stating, “The declaration of martial law stemmed from my desperation as the ultimate person responsible for national governance. However, I deeply regret the unease and inconvenience caused to the public. To the citizens who were greatly alarmed, I offer my sincere apologies.”
• Assurance Against Recurrence: He firmly assured that no further declaration of martial law would occur.
• Delegation of Future Governance: The president stated that he would leave the stabilization of national governance, including discussion around the remainder of his term, to the ruling PPP party.

In response to this address, discussions within the National Assembly, particularly among the ruling PPP, regarding constitutional amendments for reduced presidential terms and orderly resignations are anticipated to begin. This would likely lead to interim governance under a prime minister-led administration.

Anticipation of a Constitutional Amendment for a Reduced Term and Early Presidential Election

The ruling party is expected to focus on a strategy of “orderly retreat,” using the time to emphasize legal vulnerabilities and scandals associated with opposition presidential candidates while preparing for the next election. Political negotiations within the National Assembly will likely center around issues such as a renewed impeachment attempt by the DPK, the timing of President Yoon’s resignation, the formation of a bipartisan caretaker Cabinet, and constitutional amendments for a shortened presidential term. These discussions will shape the timeline for the next presidential election.

Formation of a Bipartisan Caretaker Cabinet and a Prime Minister-Led Government

South Korea is expected to transition to a bipartisan caretaker Cabinet, with the Executive Branch being led by the prime minister. Ahead of the impeachment vote, PPP leader Mr. Han Dong-hoon met with Prime Minister Han Duck-soo for over an hour to discuss strategies for addressing the public’s dissatisfaction and stabilizing governance following the martial law crisis.

Renewed Push for Impeachment by the DPK

The DPK and allied opposition parties officially announced their intention to resubmit the impeachment motion against President Yoon on December 11. Should this motion pass, the Constitutional Court will be tasked with reviewing the case and deciding whether to uphold or reject the impeachment.

The Constitutional Court requires a full bench of nine justices to hear impeachment cases, with at least seven justices present for deliberation. However, the Court is currently operating with only six justices due to three vacant seats, as replacements have not been appointed following the expiration of the previous justices’ terms in October. This procedural gap could affect the timeline and outcome of the impeachment process. 

Prospects for South Korea’s Political Landscape 

2004 Impeachment Motion Against President Roh Moo-hyun

The economic shock from the impeachment proceedings against former President Roh Moo-hyun was short-lived. The government promptly implemented market stabilization policies and reassured foreign investors, leading to the stabilization of the exchange rate within a week.

2016 Impeachment of President Park Geun-hye

During the impeachment proceedings against former President Park Geun-hye, the Consumer Sentiment Index (CSI) dropped from 102.7 in October 2016 to 96.0 in November, further declining to 93.3 by January 2017. The CSI recovered to over 100 by April 2017, after the Constitutional Court upheld the impeachment.

However, the short-term economic impact included suppressed consumption and heightened downside risks. The domestic GDP growth rate, which was 3% earlier in 2016, fell to 1% during Q4. Similarly, consumer sentiment weakened during the impeachment process for former President Roh Moo-hyun in 2004, with Q1 GDP posting negative growth (–0.5%) before recovering to 1% growth by Q4. 

Economic Environment as of December 8, 2024 

Economic Uncertainty and Potential for Further Instability

Following President Yoon Suk-yeol’s martial law declaration and subsequent repeal within six hours, public anxiety has spread, particularly amid growing calls from the opposition for impeachment. Concerns have emerged that consumer sentiment, already weakened, may deteriorate further as South Korea enters the post-attempted-impeachment crisis.

To address immediate market instability, the South Korean Government convened two macroeconomic and financial stability meetings after the martial law declaration, announcing an unlimited liquidity supply plan. While the financial markets have shown relative stability following the repeal of martial law, these measures indicate preparation for potential economic turbulence tied to a prolonged political crisis. 

Materials presented by Edelman Global Advisory Japan. For additional information, reach out to Huan.Hwang@Edelman.com or Richard.Andrew@EdelmanEGA.com