Riding wave of voter anger, South Korea's Lee now faces policy challenges

By Ju-min Park and Hyunsu Yim

SEOUL (Reuters) -South Korea's new President Lee Jae-myung rode a wave of voter anger against the December martial law attempt by his ousted predecessor, but his ability to lead will be judged by the strength of his policies.

Lee's decisive victory in Tuesday's snap election over Kim Moon-soo, the candidate for the conservative People Power Party, hands the liberal leader a resounding mandate and his Democratic Party in control of parliament.

Healing the political rifts that led to former President Yoon Suk Yeol's shock martial law and its divisive aftermath will be a tall order.

Analysts say both candidates were vague on their policy plans during the campaign, and Lee Jun-han, a political science professor at Incheon National University, said the results are more an indictment of Yoon and his PPP's poor performance than an endorsement of the DP.

He said Kim, who opposed Yoon's impeachment, was unprepared and the PPP did not show remorse after the martial law.

"(The next president) should properly interpret that the people's choice has been one-sided and reflect that in the government's operation or politics in the future," he said. "If they don't, public sentiment will fluctuate quickly."

While Lee has had his eye on the presidency for years, there have been major developments since he narrowly lost to Yoon in the 2022 election, said Kim Jun-seok, a political science professor at Dongguk University.

"Now he has restoration of democracy as one of his tasks," Kim said. "Nonetheless, there are huge challenges faced by South Korea. A grim outlook on the economy that's projected to grow maybe less than 1%. And there's a crisis outside, dealing with Trump. He has a lot of work to do."

Voters said they were looking for the winner of the snap election to calm the economic and political shocks that have roiled the country since Yoon's December 3 martial law decree led to months of economic downturn and sparked nationwide protests.

Many complained, however, about a lack of specifics in policy debates.

Lee has pledged to draft a second supplementary budget for the year as soon as the election is over, and promised vouchers to help local businesses and subsidies for childcare, youth, and the elderly to address growing discontent around tightening purse strings.

His camp says they intend to seek more time to negotiate on trade with U.S. President Donald Trump, but it is unclear how any request for an extension of the tariff deadline will be received in Washington.

With a rise in anti-China sentiment among South Koreans and Trump's push to isolate Beijing, Lee must also tread carefully with any plans to improve ties with China.

Lee has also shown sensitivity to the political winds, moderating some of his stances on China, Japan, and populist economic policies such as universal income ahead of the election.

"I hope he will resuscitate the economy and get rid of insurrection forces," said Im Young-taek, 64, a small business owner. "And I do really hope he will make people comfortable. Things may not be easy with Trump but I hope he will hire capable aides and resolve the issues well."

Lee's Democratic Party will control parliament, easing the passage of legislation and budgets after years of deadlock between Yoon and the legislature.

That may do little to soothe political polarization, however, with conservatives warning that Lee and the DP will steamroll over any opposition.

"They have absolute power, which could lead to a departure from social unity," said Incheon University's Lee. "Since they are the absolute majority, there seems to be little check and balance to stop them."

In May, a DP-led committee passed legislation aimed at changing an election law that Lee had been convicted of violating.

They have also promised to pass legislation clarifying what protections presidents have from criminal investigations, a move seen as trying to reduce Lee's exposure to other ongoing charges.

(Reporting by Ju-min Park and Hyunsu Yim; Additional reporting by Joyce Lee; Writing by Josh Smith; Editing by Saad Sayeed)