South Korea is reeling after spending hours under a surprise martial law declaration
Soldiers attempted to enter the National Assembly building in Seoul after South Korean President Yoon Suk Yeol declared martial law.
In a stunning move that threw the nation into turmoil, South Korea’s president, Yoon Suk Yeol, invoked martial law on Tuesday, only to reverse course six hours later.
The decree, which brought temporary military control and the suspension of civilian government activities and civil liberties, marked South Korea’s first declaration of martial law since the country’s democratization in 1987.
The last time that a South Korean leader declared martial law was in 1979, in the aftermath of the assassination of the president.
The resulting turmoil in this instance could be felt for some time.
Calls are growing for the president’s resignation. All six opposition parties filed an impeachment motion on Wednesday, with a vote set for Friday or Saturday, according to the Yonhap news agency.
After Yoon ordered martial law, South Korea’s parliament voted unanimously to block the decree, declaring the move invalid, but martial law remained in effect.
Yoon announced he would lift martial law and withdraw troops the following day. The Joint Chiefs of Staff then said that the deployed troops had returned to their original units. In the aftermath, Yoon’s cabinet approved the reversal.
But the reversal of the order wasn’t enough to stymie economic anxieties that arose out of the unrest. On Wednesday, South Korea’s Kospi Index closed 1.4% lower. The won fell to its lowest level since October 2022 but trimmed losses in Asian hours.
Companies in the country, including South Korea’s SK Group, a conglomerate of semiconductor and energy businesses, and Korean shipbuilder HD Hyundai, were hosting emergency executive meetings in the early morning hours on Wednesday, per Bloomberg.
“We are concerned that these events could impact South Korea’s sovereign credit rating, although this is uncertain at this stage,” wrote Min Joo Kan, ING Economics’ senior economist in Seoul, in a research note.
The leader of Yoon’s party said that the ruling party feels “deeply sorry to the public,” adding that “the president must directly and thoroughly explain this tragic situation” and that those who called for martial law should be held accountable.
Yoon’s entire cabinet and all of his aides have offered to resign, according to local reports.
Meanwhile, the country’s largest labor union, the Korean Confederation of Trade Unions, is on indefinite strike, demanding Yoon’s resignation, which could hurt production.
On Wednesday, thousands gathered for protest rallies across the country, including outside South Korea’s national assembly.
South Korean protesters hold a banner that read “We condemn Yoon Suk Yeol’s illegal martial law” during a rally in Seoul on Wednesday.
Why did Yoon declare martial law?
Yoon indicated the move was necessary to counter North Korea, but the move appears to be at least partly political.
In a televised address, he spoke of “anti-state forces,” saying martial law was necessary to eliminate them quickly and “normalize the country.” He also criticized the country’s opposition politicians, responding to a series of political setbacks that have frustrated his agenda.
Yoon has suffered from low approval ratings this year and has been described by critics as a “lame-duck president,” as he holds the nation’s highest office without having a majority in its legislature.
Yoon’s conservative People Power Party lost a general election in April, in which the rival Democratic Party of Korea took 175 of the 300 seats in the National Assembly.
The opposition majority in parliament last week voted to cut almost $3 billion from Yoon’s 2025 budget, undermining his plans. They have also tried to impeach three top prosecutors, The Associated Press reported.
Even as he reversed his martial law decision, Yoon continued to criticize those he saw as frustrating his agenda, requesting in a later address that the National Assembly “immediately stop its reckless actions that paralyze the functions of the state through repeated impeachment, legislative manipulation, and budget manipulation.”
The decision to invoke martial law led to parliamentary activity being prohibited, according to the country’s government-funded Yonhap news agency. Anyone who violated the rules could have been arrested without a warrant.
The outlet also said that media and publishers fell under the control of South Korea’s military.
The provisions of martial law also allowed for the suspension of certain civil liberties.
About 300 soldiers were deployed on Tuesday night.
What has been the political reaction?
Yoon’s late-night announcement prompted protests outside parliament, with some trying to climb its walls. There was also intense criticism of Yoon for short-circuiting the country’s democracy.
Han Dong-hoon, the leader of the ruling People Power Party, said imposing martial law was “wrong” and that he would “stop it with the people.”
South Korea’s main opposition leader, Lee Jae-myung, described the move as unconstitutional.
Yoon was already an unpopular leader in Korea. Gallup’s latest poll, released last week, showed his approval rating falling to 19%, per a poll of 1,000 adults.
The unexpected declaration of martial law was also said to have caught the Biden administration by surprise.
South Korea is a key US ally in the Indo-Pacific region and is a base for roughly 28,500 American service members, as well as numerous civilian workers and dependents.
“We continue to expect political disagreements to be resolved peacefully and in accordance with the rule of law,” US Secretary of State Antony Blinken said in a statement after the martial law was rescinded.
How has the economy been affected?
Markets reacted immediately to South Korea’s political crisis, with US-listed Korean stocks and the South Korean won taking a hit in overnight trade.
While shares of Samsung Electronics, the country’s largest company, dropped 3% before paring losses, South Korea’s Kospi Index fell 2.2% and closed 1.4% lower on Wednesday.
South Korean authorities have rushed to reassure investors.
The country’s finance ministry said on Wednesday it was standing ready to deploy all necessary measures to stabilize the financial markets.
“We will inject unlimited liquidity into stocks, bonds, short-term money market as well as forex market for the time being until they are fully normalised,” the ministry said in a statement.
On Wednesday, Kim Byung-hwan, the chairman of South Korea’s Financial Services Commission, said the government was ready to activate a $35.4 billion stock market stabilization fund immediately and take other measures to address market concerns if needed.
But Rhee Chang-yong, governor of the Bank of Korea, told Bloomberg TV on Wednesday evening local time that South Korea’s financial markets were stabilizing quickly and that the impact on markets was short-lived.
He added that he believed South Korea’s economic dynamics can be separated from its political dynamics.
Even so, a few hours later, the OECD lowered South Korea’s 2025 growth economic outlook to 2.1%, from 2.2%.
One notable stock surge amid all the turmoil: Kakao, and subsidiaries Kakaopay and KakaoBank, were up on Wednesday. Billionaire founder Brian Kim was arrested in July on charges of manipulating a major K-pop agency deal last year.
