Coronavirus Concerns Intensify in South Korea
February 13, 2020
There have not yet been any fatalities from the coronavirus in South Korea. Nonetheless, the public health risk is poised to have an outsized economic and political impact on the country, says KEI Fellow and Director of Academic Affairs Kyle Ferrier in his latest column for the Diplomat Magazine.
In particular, given the economic challenges that South Korea faced in 2019, Ferrier notes that whatever measures are needed to contain the virus would be worth the cost in 2020.
Ferrier points out that South Korean exports fell by 6.1 percent in January compared to the same period a year earlier. Manufacturers like South Korean automakers Hyundai, KIA, and SsangYong Motor were forced to temporarily cut or suspend production due to a lack of necessary parts from suppliers in China. Tourism in particular is expected to take one of the biggest hits. Major Korean travel agencies have cancelled all trips to China and major airlines have cut or suspended many routes to China. Chinese tourists are estimated to have brought in more than $11.5 billion to the South Korean economy in 2019. The loss of this income to the Korean economy could be significant.
In a political sense, the coronavirus is a wild card issue that could upend expectations for the April National Assembly elections. President Moon Jae-in’s Minjoo Party is expected to do well in the upcoming election. However, how his government manages the spread of the virus will likely move votes. Slow response to the outbreak of the Middle East Respiratory Syndrome (MERS) by the preceding Park Geun-hye administration in 2015 contributed to the public’s loss of confidence that precipitated in a presidential impeachment. Cognizant of this precedent, Moon has prioritized responsiveness and transparency in trying to curb the spread of the virus and related adverse effects.
The most important issue for voters, however, remains the economy. Should coronavirus fears outweigh the government’s initiatives to boost the domestic economy in the first half of the year, it could undercut the momentum Moon was trying to build heading into the legislative election in mid-April.
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