[Inside Chodong] All Eyes on Presidential Pledges... 'Value-Up' Must Continue

"Who would trust and invest in economic policies with an expiration date of less than five years? If existing policies are discarded and overturned every time the administration changes, it can never gain trust in the international community."

During the peak of the 'Seohak Ant' boom, a former official I met in New York cited the structural instability of economic policies as one of the causes of the so-called 'Korea Discount.' He pointed out that the repeated situation of policies being discarded and reset with each regime change not only wastes administrative resources but also undermines policy consistency and increases market uncertainty.

With President Yoon Seok-yeol's impeachment and the upcoming June Rose Election, Korea is once again at a crossroads of such policy resets. Although the major presidential candidates' pledges have not yet been disclosed, it is highly likely that many policies will again be discarded or shelved. Even the surviving policies are expected to be 'repackaged' with only their names changed repeatedly.

In fact, it is very natural in democratic countries for policies to change when administrations change. Since the direction chosen by the people has shifted, it is only natural for the new government’s policy direction to be set accordingly.

However, the problem lies in the fact that even economic policies, which should be handled independently of political cycles, fluctuate with each administration, leaving deep traces of distrust in the capital market. Economic policies require consistent direction more than any other sector due to their characteristics, such as taking several years or more for policy effects to become visible. Especially, capital markets operate based on such consistency and predictability. In other words, what matters to foreign investors and companies is not 'who holds power' but 'whether the country's system is trustworthy.'

The former official’s point that global capital deciding on long-term investment is almost nonexistent in countries where policies change with every regime change stems from this. This is precisely why major advanced countries like the United States, Japan, and Germany have consistently maintained core economic policies even during regime changes. Through system-based policy continuity, they send a signal to foreign investors that 'long-term strategies and investments are possible in this country.' Conversely, the moment political logic is brought into economic policy, market trust inevitably collapses. Moreover, for a country like Korea that relies on exports, managing external credibility is even more critical.

Korea’s capital market has long struggled to shake off the chronic problem known as the Korea Discount. For the 'Value-Up (Corporate Value Enhancement) Program,' which the Yoon Seok-yeol administration has been emphasizing since last year, to lead to the resolution of the Korea Discount, consistent implementation that does not waver even after the Rose Election is essential. The fortunate thing is that there is currently a consensus across both ruling and opposition parties on the need to advance the capital market.

Presidential candidates about to announce their pledges must also remember that the Value-Up Program is not a project of any single administration but a long-term project for the capital market. Regardless of who comes to power, policy consistency aimed at raising the fundamentals of Korea’s capital market must be maintained. It should neither be reduced to short-term populism nor be an administrative waste of repackaging with only name changes due to regime change. Continuity and consistency beyond administrations?that is the true value-up.