Amid COVID-19 and Real Estate Crises... Yoon Administration Engulfed in Early Challenges

President-elect Yoon Suk-yeol / Photo by Transition Team Press Photographers

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[Asia Economy Reporters Kum Boryeong and Moon Jewon] It has been reported that the Yoon Seok-yeol administration has decided not to separately designate a 100-day agenda after its launch. The reason is that there are already numerous urgent issues to address early in the administration, such as COVID-19 recovery, making it unnecessary to categorize them separately. Accordingly, unlike previous administrations, there are concerns that the new government might become bogged down in resolving immediate issues from the outset, rather than drawing up long-term plans for the five-year term. The Presidential Transition Committee is preparing around 100 national tasks that will serve as the foundation for the new government's five years, but the situation inevitably demands a greater focus on short-term issues unprecedented in previous administrations, such as COVID-19 and the rapid rise in housing prices.

According to the Transition Committee on the 21st, the new government is prioritizing COVID-19 as an urgent issue to be resolved immediately after its launch. A '100-day roadmap for COVID-19 policy' is already being prepared. A committee official stated, "We are currently examining detailed aspects such as emergency financial support for small business owners, improvements to quarantine guidelines, and securing treatments."

Because of this, there are concerns that the government's policies will focus on detailed aspects after its launch. This differs from the early stages of previous administrations. In the past, the majority of initial tasks were centered on concrete large-scale themes such as 'reviving the economy' as core national agendas. The Lee Myung-bak administration, which pursued neoliberalism, focused on deregulation measures such as privatizing public enterprises and lowering income and corporate taxes, aiming for a 7% economic growth rate. The Park Geun-hye administration devoted efforts to forming major agendas like creative economy and economic democratization early in its term, while the Moon Jae-in administration emphasized income-led growth with policies such as raising the minimum wage as key tasks.

In contrast, although the Yoon Seok-yeol administration is putting corporate deregulation at the forefront, there are criticisms that its economic policy agenda is weak. Despite inflation exceeding 4% due to the Ukraine crisis and growing concerns about stagflation, many analyses suggest there are not many cards left to play. In particular, with plans to push for a supplementary budget of up to 50 trillion won early in the term, price stability is expected to emerge as the top priority in the new government's first year. A Transition Committee official said, "We are reviewing tasks such as price stabilization in communication with the Ministry of Economy and Finance."

Early real estate policies of previous administrations largely depended on whether housing prices were rising or falling at the time. For example, the Lee Myung-bak administration, launched in 2008, focused on market activation policies as housing prices fell sharply due to the Lehman Brothers crisis. The Park Geun-hye administration also focused on reducing regulations related to real estate transactions and strengthening policies to stabilize the rental market amid declining housing demand and increasing demand for jeonse (long-term lease deposits).

In contrast, under the Moon Jae-in administration, demand increased and housing prices soared, leading the government's real estate policy to take the direction of a 'war on speculation.' The Yoon Seok-yeol administration also prioritizes 'housing price stabilization,' but unlike the previous government, it is coordinating national tasks under a policy framework that combines deregulation and supply expansion. However, many opinions suggest that early implementation of plans such as supplying 2.5 million housing units, expanding the metropolitan express railway, and abolishing the lease protection law will be impossible due to budget constraints and difficulties in cooperation with opposition parties.

Um Kyung-young, director of the Era Spirit Research Institute, analyzed, "With numerous domestic and international issues piling up and a situation of a minority government, urgent resolution is a priority. It will not be easy for President-elect Yoon, who has limited political experience, to refine long-term national tasks in detail while solving short-term issues."

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