[Constitutional Amendment, Connecting the Future] "Issues to be Solved through Cooperation, Not Martial Law; Presidential Power Must Be Decentralized"

Park Seung, Former Governor of the Bank of Korea, Offers a Veteran’s Perspective on Current Affairs
"The Reason the People Created a Majority Opposition Was to Urge the President and Opposition Parties to Share Power and Cooperate"
Calls for Urgent Reform of Labor, Regulation, and Social Vested Interests

Editor's NoteThe Constitution of the Republic of Korea is the foundation of the nation and the standard for the lives of its people. The '1987 system,' symbolizing the last constitutional amendment, is now being called into question. This signifies the need for new standards to redesign Korea's present and future, considering nearly 40 years of change. For members of the National Assembly and political scientists, constitutional amendment is recognized as an inevitable task of the times. The 'social turmoil' triggered by the emergency martial law paradoxically revitalized the momentum for constitutional reform. Across the political spectrum and various sectors of society, constitutional amendment has emerged as a key topic of interest. Based on diagnoses from former presidents of European countries that have experienced constitutional amendments, as well as political and economic scholars from the United States and Japan, the president of the Korean Constitutional Association, and former governors of the Bank of Korea, this article aims to analyze this era of great transformation and sketch a constitutional amendment suited to our society.

Park Seung, former Governor of the Bank of Korea, is giving an interview to Asia Economy. 2025.02.21 Photo by Yoon Dong-joo

"What should have been resolved through cooperation was ultimately attempted to be solved by the extreme measure of emergency martial law. Politicians must deeply reflect on this."

Park Seung, former Governor of the Bank of Korea and former Presidential Chief Secretary for Economic Affairs, expressed his regret about the current reality of Korean society in an interview with Asia Economy on the 7th. Born in February 1936 and now 89 years old, he is a witness who has experienced the twists and turns of modern Korean history firsthand.

In an era where societal elders are disappearing, the presence of former Governor Park Seung is a great strength for us. He possesses the insight to convey the spirit of the times regarding the direction our society should take in key areas such as finance, economy, politics, and society. It is a crisis situation that a senior figure approaching 100 years old must worry about the present reality. At the crossroads of turbulent history, his advice and exhortations serve as a guide for our society. Even his calm remarks about Bukhansan and his health contain lessons that younger generations should heed.

"The National April 19th Cemetery at the foot of Bukhansan is still a place I visit often. Along with Seooreung, it is my favorite walking course." Former Governor Park walks the walking course around the April 19th Cemetery for 30 minutes daily, reflecting on the past, present, and future of our society.

Former Governor Park has only more white hair, but his gaze remains as sharp as in his active days. He recalled, "In 1960, during the April 19th movement, I was a senior at Seoul National University of Commerce and stood at the front line of a student protest of 500 to 600 people. As one who directly experienced and participated in everything that day, I can never forget it."

Even now, when he walks around the April 19th Cemetery, he comforts the spirits and recalls acquaintances buried there by looking at each tombstone. He remembers his teachers from school days, martyr Kim Ju-yeol, and Lee Ki-taek, former Democratic Party chairman and then student council president of Korea University’s College of Commerce, never forgetting that bloody day.

He said, "I remember helping students who were shot, carrying them to cars, and rushing to the Central Government Building (near today’s Gyeongbokgung Station) in excitement upon seeing students bleeding." Former Governor Park emphasized, "The National April 19th Cemetery is a special place for me because it is where those who sacrificed themselves opposing the rigged March 15th, 1960 election are buried." The following is a Q&A.

- The December 3rd emergency martial law incident must have felt particularly significant to you.

▲ Something completely unacceptable to the people happened. Some say it was caused by the 'minority ruling majority opposition' situation, but such a situation exists in many countries and has occurred several times in Korea as well. The people created this minority ruling majority opposition to urge the president and opposition parties to share power and cooperate. However, President Yoon did not cooperate with the opposition during his term and only held a summit meeting after the general election defeat. This itself proves the seriousness of the problem.

The martial law incident severely damaged our economy’s growth, investment, and citizens’ livelihoods. If not resolved quickly, the country’s credit rating will soon be downgraded, and the economy will fall into a very difficult situation. The constitution must be amended to disperse presidential power.

- Society has become more divided since the martial law incident. How does this affect our economy?

▲ The primary underlying cause of our society’s polarization is the division between North and South Korea. The second is social polarization, including widening gaps in wealth, region, and generations. Recently, I believe it is also related to the growth of extreme left and right political forces. In Europe and the West, far-right parties like the Nazis have gained power, and I worry that similar far-right forces might grow in Korea.

Considering Korea’s future, it is desirable for rational conservatives and progressives to alternate in power. Efforts must be made politically and socially to resolve social polarization, especially wealth disparity, and to promote national unity to prevent the growth of extremist forces. At the same time, continuous efforts are needed to ease tensions between North and South. In extreme confrontation between the two Koreas, it is difficult to guarantee stability and peace in our country and to maintain social integration.

Former Bank of Korea Governor Park Seung is being interviewed by Asia Economy. 2025.02.21 Photo by Yoon Dong-joo

- Do you see problems with the Yoon Seok-yeol administration’s North Korea policy?

▲ For example, if there is a ruthless gangster, confronting him head-on is not helpful. It is better to maintain peace while being cautious to prevent harm. Currently, North Korea has no power to help South Korea but has unlimited power to obstruct South Korea’s development. Since South Korea overwhelmingly surpasses North Korea in income, North Korea will inevitably self-destruct over time.

In that sense, South Korea should manage relations with North Korea in a way that maintains peace and economically assist North Korea. The complete severance of dialogue and extreme confrontation between the two Koreas have brought the North to a stage of denying unification and the nation. We must recognize that such hardline responses did not stop North Korea’s nuclear development but rather accelerated it.

- There are growing calls for structural reform. What reforms are most urgently needed?

▲ Urgent reforms are needed not only in political reform based on cooperation but also in labor, regulation, and social vested interests. Only through reform can the Korean economy regain growth and vitality. Cooperation from the opposition is essential for reform. Labor reform should allow companies to lay off workers when unavoidable, like in the U.S., to create flexible labor markets and open new employment opportunities for young people. Regulatory reform requires removing regulations in all areas of production and investment, but there has been no progress.

Bold reforms must ensure that companies face no constraints in growth and investment. A representative issue in dismantling social vested interests is the medical sector. Doctors’ vested interests are so strong that problems have not been properly resolved despite public demands. Although President Yoon’s medical reform had issues?trying to do everything at once rather than gradually, failing to engage in dialogue with the medical community and the public, and neglecting cooperation with the opposition?I believe his intentions were right. Even if the administration changes, the basic direction of dismantling vested interests in the medical sector should be maintained.

Former Bank of Korea Governor Park Seung is taking a walk around his home in Pyeongchang-dong. Governor Park cited walking for about 30 minutes a day as his secret to health management. 2025.02.21 Photo by Yoon Dong-joo

- You have long pointed out real estate issues. What policies are needed for housing stability?

▲ The biggest challenge for the Korean economy is the real estate problem. In the mid to long term, there is little chance of a significant rise in housing prices. This is an opportunity. First, supply must be continuously increased, even by lifting the Green Belt in the metropolitan area to actively increase supply. Second, real estate holding taxes must be strengthened. Currently, real estate holding taxation is about one-third of that in advanced countries. Strengthening real estate holding taxes is necessary to eliminate speculative demand for housing and reduce wealth disparity.

Taxation should focus more on assets than income. Korea must increase asset taxation going forward. Lastly, when housing prices decline, the government must never implement economic stimulus policies. If these three principles are followed, housing prices will fall by half within ten years. Korea’s problems are wealth disparity and low birth rates, which ultimately stem from real estate issues.

- There are growing concerns that Korea is following Japan’s path. What solutions exist to avoid entrenched low growth?

▲ Japan has experienced a long-term economic stagnation with an average annual growth rate of 0.7% over the past 30 years. According to Bank of Korea estimates, Korea’s potential growth rate will fall to 0.6% in 20 years, lower than Japan’s 0.7%, ushering in an era of zero growth. Escaping this requires bold structural reforms. First, we must prevent the decline of the productive workforce by increasing birth rates and opening immigration policies. A science and technology-driven national policy is also necessary.

With no natural resources and a declining population, this is Korea’s only breakthrough. The semiconductor industry is already being chased by Taiwan, and becoming number one globally is difficult. To achieve this, government, business, and education must unite. The government must lead industry and education, not leave it solely to the private sector. Creating an environment that promotes investment is urgent. The government should boldly support private companies through tax incentives and actively invest in social overhead capital (SOC) such as roads and ports.