Government policies and PPP innovations, just “vopulism” that could be “toxic” in drawing votes

A Turbulent Market: As the government and the People Power Party (PPP) present a string of populist policies, such as the incorporation of Gimpo into Seoul and the ban on short-selling shares, with the parliamentary elections in mind, a board in the Hana Bank dealing room in Jung-gu, Seoul display the KOSPI and KOSDAQ indices, which fluctuated due to the ban on short-selling, on November 8. Jo Tae-hyeong

The government and the People Power Party (PPP) are presenting a string of policies to attract votes in next year’s parliamentary elections. The PPP announced it was promoting the incorporation of Gimpo-si into Seoul, and the government followed by temporarily banning stock short-selling, scrapping the zero-disposables policy, and freezing the electricity bill for homes. The PPP innovation committee also suggested changes that would appeal to the public’s dislike of politics, such as reducing the number of seats in the National Assembly. After a red warning sign went off following the party’s defeat in the by-election for the district mayor of Gangseo-gu in Seoul, the government and PPP appear to be randomly pulling out policies that could attract certain groups.

This has triggered criticism that the government and ruling PPP are engaging in “vopulism (votes + populism)” with only the immediate votes in mind, without presenting issues responsibly by contemplating their effect on society. Some inside and outside the party also warned that blindly firing away policies without a consistent strategy could actually turn voters away.

On November 8, the government decided to freeze the power bill for residential and general uses and only increase the price of power used for industrial purposes, which applies to large companies. They were conscious of the approaching election and did not touch electricity prices that applied to storeowners and general homes. With the Korea Electric Power Corporation (KEPCO) deep in the red, the latest government decision was criticized as a makeshift measure trying to avoid restructuring the pricing policy--connecting the electricity bill to fuel prices.

The temporary ban on short-selling shares, which the government enforced on November 6, was the result of reflecting the wishes of 1.4 million individual investors. On the first day, the KOSPI index jumped over 5%, but it dropped for two consecutive days, turning the government measure into a “one-day reign.” The government implemented an extreme measure used only when the market faced the risk of collapse, such as the world financial crisis in 2008 and the covid pandemic in 2020, to gain the votes of individual investors, but the effect is uncertain. Securities experts voiced concerns that the ban on short-selling did not agree with international standards, and could actually lead to the undervaluing of South Korean stocks.

The government’s decision to scrap the zero-disposables policy announced on November 7 was intended to attract votes from some self-employed business owners who were pressed by the ban on disposable cups and straws, but it has triggered opposition from the young twenty- and thirty-somethings sensitive to the climate crisis.

The incorporation of Gimpo-si into Seoul and the “mega-Seoul” project, which PPP leader Kim Gi-hyeon proposed, drew support from the PPP mayors and party member councils in some cities, such as Gimpo, Hanam, Guri and Goyang, but it is facing opposition from PPP chiefs of other metropolitan areas, including Incheon Mayor Yoo Jeong-bok and Daegu Mayor Hong Joon-pyo (Jun-pyo). Faced with escalating concerns of Seoul citizens, who fear that they could be subject to reverse discrimination, and criticism that the proposal goes against the balanced development of the nation, the PPP is currently slowing down and keeping an eye on the situation.

The second set of innovations that Ihn Yo-han’s innovation committee presented on November 3 also came under fire for trying to take advantage of the public’s hatred of politics to win in the parliamentary elections with proposals such as cutting back the number of seats in the National Assembly and returning the annual allowance.

According to the incumbent government’s policy direction, which emphasizes sound finances, such policies proposed by the government and PPP are different from fiscal populism, for instance, the massive input of fiscal resources like the covid disaster relief fund. The policies mostly benefit certain job types, groups and regions or are likely to appeal to these specific groups. Some point out that hastily presenting ill-prepared policies could end up being toxic.

Lee Jae-myung, leader of the Democratic Party of Korea, said in a meeting of the party’s Supreme Council Thursday, “Recently, there has been a lot of remodeling of important policies born from national consensus on a populist whim,” and added, “It may be sweet for a moment, but if they engage in toxic acts, it will inevitably lead to failure in state administration.”

Eom Gyeong-yeong, director of Zeitgeist Institute, said over the phone Thursday, “The Yoon Suk-yeol government entered office with support from the twenty- and thirty-somethings by introducing policies that might not be effective in the short-term but in the mid- to long-term benefit the future generation. But they are presenting policies that squarely go against this basic direction.”

People inside and outside the PPP also question whether such proposals will help the party obtain votes.” “When I look at what the government and PPP have been doing recently, they are recklessly making proposals without any strategy. So I’m not sure they’ll help earn votes and they are not future-oriented either,” said Lee Kwan-hu, a professor of politics at Konkuk University’s Sang-huh College over the phone Thursday, adding, “We can’t call it populism. I think we should call it ‘vopulism’ with only the immediate votes in mind.”

One PPP member said, “I’m not sure if the incorporation of Gimpo into Seoul would help earn votes. In the election for Gangseo-gu district mayor, we suggested ‘Turn Hwagok into Magok,’ but it only backfired among the tenants. I’m worried that it might backfire again this time.”