Democratic Party presidential candidate Lee Jae-myung performs a campaign stunt promoting a “KOSPI 5000 era” as a symbol of economic recovery during a rally for Seoul’s Seocho and Gangnam districts held in front of the Express Bus Terminal on May 29, during the presidential campaign period. (Yonhap)
SEOUL, June 4 (Korea Bizwire) — As Lee Jae-myung steps into the South Korean presidency, he inherits a nation weighed down by global headwinds and domestic fatigue.
Confronted by a trade war brewing across the Pacific and an economy teetering on stagnation, the former human rights lawyer-turned-political brawler is shifting into the role of crisis manager — a mantle he’s no stranger to.
“The first order of business is economic recovery,” Lee declared at a press conference on the eve of his election victory over conservative rival Kim Moon-soo. “Reviving the economy and restoring livelihoods must take precedence above all else.”
It was a message tailored for a weary electorate — and one underscored by urgency. Just weeks from now, on July 9, the clock will run out on U.S. President Donald Trump’s 90-day suspension of punitive global tariffs, including a potential 25 percent levy on South Korean exports. Lee has vowed to make an early summit with Trump a top diplomatic priority, hoping to salvage what remains of Korea’s trade competitiveness.
The new government led by Lee Jae-myung, the Democratic Party candidate who is virtually confirmed as the 21st president-elect, is expected to make bold investments in artificial intelligence (AI) technology and focus on creating an environment where all citizens can become proficient in using AI. (Yonhap)
At stake is not just diplomacy, but economic lifeblood. South Korea’s export-driven economy contracted 0.2 percent in the first quarter of 2025, and exports to both the U.S. and China — its top trade partners — slumped by more than 8 percent in May. The Bank of Korea has slashed its 2025 growth forecast to 0.8 percent, signaling the weakest expansion since the pandemic-hit year of 2020.
“The leadership vacuum left by the previous administration contributed to our vulnerability in trade,” said former Trade Minister Yeo Han-koo. “Rebuilding trust through summit-level diplomacy is critical.”
But Lee is preparing for more than handshake diplomacy.
President-elect Lee Jae-myung, during his tenure as governor of Gyeonggi Province, announced a series of support measures for small business owners and self-employed workers hit hard by the COVID-19 crisis. Regarding the policy loans provided to them, he has consistently argued that the government should go beyond simply extending maturities and instead inject public funds to meaningfully reduce their debt burden. (Yonhap)
Stimulus, Strategy, and the ‘KOSPI 5000’ Dream
To blunt the economic drag, Lee has pledged an ambitious 30 trillion-won ($21.8 billion) supplementary budget, following a 13.8 trillion-won package passed by the National Assembly in April. It’s a stopgap designed to prop up consumption and small businesses, but Lee has his eyes on a longer game.
Among his flagship promises: a 100 trillion-won public-private AI fund to vault South Korea into the top tier of global artificial intelligence powers. He envisions a sweeping industrial pivot — toward bio-healthcare, defense tech, clean energy, and advanced manufacturing — all backed by what he calls the “largest-ever” public investment in research and development.
Lee has also staked political capital on transforming the financial sector, promising to double the KOSPI index to over 5,000 and eliminate the persistent “Korea discount” — the undervaluation of Korean stocks relative to global peers.
Key to that vision is corporate reform: passing the revised Commercial Act (vetoed last month by the outgoing interim president), expanding fiduciary duties of board members, and curbing stock manipulation to restore investor trust.
Democratic Party presidential candidate Lee Jae-myung (C) answers reporters’ questions during a visit to a traditional market in Inje. (Image courtesy of Yonhap)
A Demographic Reckoning
But beneath the short-term urgency lies a slower-burning crisis that could define Lee’s presidency: South Korea’s demographic collapse. With more than 20 percent of the population now over age 65, the nation has officially entered the ranks of “super-aged” societies. The country’s total fertility rate fell to 0.75 in 2024, one of the lowest in the world.
Unless reversed, the trend could pull South Korea into negative economic growth after 2050, the Bank of Korea has warned.
Lee has yet to roll out a detailed plan for tackling demographic decline, but experts say structural reforms — including pension restructuring, labor market flexibility, and retirement age revision — will be unavoidable.
“In a super-aged society, these issues must be addressed together, not in isolation,” said Yang Joon-seok, professor of economics at the Catholic University of Korea.
Lee Jae-myung, the Democratic Party’s presidential candidate and virtual president-elect, walks toward the podium to deliver a speech at a public vote-count broadcast event hosted by the party near the National Assembly in Yeouido, Seoul, on June 4. (Yonhap)
A Presidency Forged in Crisis
Lee’s presidency began in the shadows of chaos: his predecessor, Yoon Suk Yeol, was impeached after declaring martial law amid civil unrest. That power vacuum — and Lee’s dramatic response — catapulted him to the presidency.
Now, expectations run high — but so do the risks. The task ahead is as formidable as the man himself. Lee enters office not as a conventional statesman, but as a battle-tested populist promising transformation.
Whether he can deliver on trade, growth, and national renewal — all while managing the burdens of age, demography, and global fragmentation — will define not just his legacy, but the course of South Korea’s next decade.
M. H. Lee (mhlee@koreabizwire.com)
