Highlights
– President Lee dismisses Minister for Food, Agriculture, Forestry and Fisheries, Minister of Education, Science and Technology and the Vice Finance Minister
– Protests surrounding the import of United States beef have been ongoing since late May
– Continued civil unrest likely to damage weakened economy
– Rallies unlikely to subside in the near-term
After weeks of protests, South Korean President Lee Myung-bak dismissed three cabinet-level ministers and a vice finance minister on July 7, 2008. The current rallies are centered on a trade agreement with the United States (US), which triggered fears of mad cow disease from US beef imports. However, South Koreans appear to be angered more by President Lee’s failing economic policies than specifics of the US trade agreement.
Less than six months after winning the presidency in a landslide election, President Lee now has a mere 20 percent approval rating. While some protesters indicate they may be scaling down demonstrations in the near-term, the move to dismiss the ministers is seen as too little too late.
Public unrest is unlikely to end in the near-term, and will likely subside only once South Koreans feel the current administration is actively moving to improve life for the average citizen.
Fear of US Beef
In December 2003, South Korea banned US beef when authorities diagnosed a cow in Washington state with bovine spongiform encephalopathy (BDE), commonly known as mad cow disease. Restrictions were partially lifted in 2006, before being halted again in October 2007, when prohibited bone fragments were found in shipments.
US President George W Bush met with President Lee in April 2008 to finalize a deal that would have eventually allowed a full range of US beef to be shipped to South Korea. The deal was likely a move to achieve the broader South Korean goal of a free trade agreement with the US. However, many South Koreans feel the deal does not ensure enough food safety and is merely an attempt by the Lee administration to appease the US.
A Korean negotiating team traveled to the US in June 2008 to urge the US to go along with a “voluntary” agreement that would bar the export of US beef from cows more than 30 months old, due to the significantly lower risk of mad cow disease in younger cows. However, even this deal does not appear to satisfy protesters who now blame Lee for the high unemployment rate, unpopular education policies and a weak economy.
Economic Implications
President Lee has urged protesters to end their candlelight vigils and rallies, citing the impact the unrest has had on the economy. He stated that the protests would eventually have a negative effect on overseas investors, as “They will have difficulty trying to understand why this is persisting.”
The civil unrest is hurting an already weakened South Korean economy. Increasing fuel prices and a slump in the won has made imports more expensive and sent consumer confidence to its lowest level since 2000. Further, consumer prices increased by 5.5 percent in June 2008 from a year earlier, exceeding the central bank’s target for an eighth straight month.
Outlook for Lee
On July 5, 2008, an estimated 50,000 people gathered peacefully in Seoul, in yet another peaceful rally. Although several religious groups have announced they will no longer participate in the demonstrations, many other groups do not appear appeased by Lee’s recent dismissal of several key ministers. Protesters have begun broadcasting and reporting events related to the rallies on Internet forums and personal blogs, leading to higher levels of coordination amongst different groups.
While rallies may become smaller as some groups stop participating, small-scale demonstrations will likely continue for the near-term as economic uncertainty persists.
