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Ruling party’s early abandonment of centrist, pragmatic pledges

Published: 31 Jul. 2025, 00:00

President Lee Jae Myung, center, presides over the third meeting of an emergency economic review task force at the Yongsan presidential office in central Seoul on July 30. [PRESIDENTIAL OFFICE]

When President Lee Jae Myung took office on June 4, he vowed to lead a “flexible, pragmatic government.” During the campaign, he emphasized economic growth as his top pledge and promised support for businesses. In a meeting with the heads of Korea’s five major business associations one month before the election, he said, “The era when the government directs and drags the economy and industry is over.” The ruling Democratic Party of Korea (DP) also echoed this centrist, pragmatic stance. Prime Minister Kim Min-seok, then co-chair of the DP election committee, said, “As the Korean economy enters a downturn, whoever holds power must stabilize the country for at least two years.” The approach frustrated some progressive supporters, who lamented that the presidential race lacked a clear liberal agenda.

Barely two months into the new administration, doubts have emerged about its commitment to pragmatism and political unity. The ruling party has recently pushed corporate regulations through the National Assembly’s standing committees, including the controversial “Yellow Envelope Bill,” a revision to Articles 2 and 3 of the Trade Union Act, and tougher amendments to the Commercial Act. It is also signaling a willingness to force through revisions to the broadcasting laws, which critics say could increase government influence over media.

Business groups have reacted sharply. On July 30, 13 major associations, including the Korea Enterprises Federation, held a press conference warning that the measures would “seriously undermine our industrial competitiveness.” The American Chamber of Commerce in Korea expressed “deep concern about the potential negative impact on Korea’s business environment and investment appeal.” The European Chamber of Commerce in Korea likewise said foreign investors remain highly sensitive to legal risks posed by labor regulations. A government that campaigned on economic growth has unnerved overseas investors almost immediately after taking office.

Analysts say the ruling party’s corporate pressure stems from political calculations ahead of the Aug. 2 party leadership election, where 70 percent of voting power lies with core party members. Candidates like Chung Cheong-rae and Park Chan-dae are seen as appealing to hard-line supporters by striking a combative stance against business. Some observers suggest a division of roles: The DP pushes tough legislation while President Lee projects flexibility. In a recent emergency economic task force meeting, Lee proposed reviewing the scope of the breach-of-trust crime and rationalizing economic criminal penalties.

Democratic Party chair contenders Park Chan-dae (left) and Chung Cheong-rae speak during a joint campaign speech for the Aug. 2 leadership election at the party’s headquarters in Yeouido, western Seoul, on July 20. [YONHAP]

Yet these gestures mean little if the party presses forward with business-hostile legislation. Lee himself acknowledged that “some hesitate to invest in Korea because running a business here could land them in prison,” citing the harsh legal environment. The very law drawing concern from foreign chambers is the Yellow Envelope Bill championed by the DP. If the party forces its passage at the National Assembly’s plenary session on Aug. 4, it risks further discouraging domestic and foreign investments.

For companies already on edge amid high-stakes tariff negotiations with the United States, the ruling party’s aggressive legislative push could deepen uncertainty. If the administration allows its party to drive policies that undercut corporate confidence, its promise of a “flexible, pragmatic government” will quickly lose credibility.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.