South Korea’s Park facing last chance to push through reforms, boost growth

Thwarted in the last parliament, South Korean President Park Geun-hye may be facing her last chance to push through a series of bills aimed at bolstering a flagging economy despite a legislature that will soon be in opposition control.

Park, in the fourth year of a single five-year term, faces an uphill battle to pass legislation to loosen the notoriously rigid labour market, boost the services industry, and ease regulations to create jobs and growth in Asia’s fourth-largest economy.

These changes are crucial because growth in Asia’s fourth-largest economy halved between January and March from the previous quarter, while the unemployment rate for South Korea’s youth hit a record 12.5 per cent in February.

Despite a parliamentary majority, Park’s conservative Saenuri Party chose not to force through legislation to make the labour market more flexible, fearing public backlash over worries about job security.

But the makeup of the new parliament, and tweaks to the legislation, may help improve its chances.

When South Korea’s new parliament first sits on Monday, Park’s conservative Saenuri Party will hold only 122 of 300 seats, the opposition Minjoo Party will hold 123 and the People’s Party, led by independent Ahn Cheol-soo, will hold 38.