The president has little room to manoeuvre for the remainder of his single, five-year term after the election last month in which the opposition bloc led by the progressive Democratic Party increased its majority in parliament.
“For the next three years, we will listen closely to the voice of the people and work to improve their livelihoods,” Yoon said. His government, which backs business-friendly policies, has fallen short in some areas but added there are “green lights” ahead for the economy, the president said.
Last month, the central bank held its key rate at 3.5 per cent for a 10th consecutive time, pledging to keep its focus on fighting inflation. The economy grew more than twice as fast as expected in the first quarter largely thanks to export growth and a rebound in construction investment.
“I apologise for causing concern to the public due to my wife’s unwise behaviour,” Yoon said at the news conference.
On Tuesday, Yoon appointed a former prosecutor as the new senior secretary to the president for civil affairs, a post he had previously removed, citing excessive power it could wield on government agencies, including the prosecutors’ office. Yoon has said the move was aimed at better listening to public opinion but the opposition criticised the appointment as an attempt to control prosecutors.
Yoon took power after winning by a razor thin margin and has since seen his support fall to among the lowest for any South Korean president, reaching 23 per cent in a weekly Gallup Korea tracking poll after the April election.
The election result derailed Yoon’s plan to push through initiatives to benefit investors such as scuttling a capital gains tax, and it may have doomed his flagship policy of boosting stock valuations via the “Corporate Value-Up” programme.
Policies being pushed by the Democratic Party include a 13 trillion won plan to extend cash handouts to households as a way to boost flagging consumer demand. Yoon has rejected the idea, saying it would spur inflation and strain the budget.
At the news conference, Yoon pledged support for companies that power the export-driven economy, especially the makers of semiconductors. He also called for opposition parties’ cooperation to abolish the coming financial income tax, saying it would cause a huge amount of money to flow out of the stock market.
The president’s main foreign policy initiatives include closer security cooperation with the US and Japan, and taking a tough line with North Korea. Even though the Democratic Party has favoured rapprochement with Pyongyang and improving relations with Beijing, it has little power in parliament to set a foreign policy agenda.
Yoon said his country’s ties with Moscow had been strained by what Seoul and ally Washington say are arms shipments from North Korea to Russia, for use in Ukraine.
“North Korea’s export of offensive weapons not only supports the illegal waging of war in relation to Ukraine, but also clearly violates UN Security Council sanctions resolutions related to North Korea’s nuclear weapons,” Yoon said.
But despite tensions with Moscow over purported arms deals with North Korea, Yoon said he would work with Russia.
“Russia is a country with which we have had a good relationship for a long time,” he said.
“Due to the recent war with Ukraine, we have different positions regarding the introduction of weapons to North Korea,” he added.
“As for our relationship with Russia, we will cooperate on a case-by-case basis, and we may oppose or be wary depending on differences in position, but we will manage our relationship with Russia as smoothly as possible.”
Yoon will face a test on the diplomatic front later this month when Seoul is set to host the first three-way summit since 2019 of figures from China, Japan and South Korea. There is also speculation he could have formal discussions in July with US President Joe Biden and Japanese Prime Minister Fumio Kishida to build on their security cooperation.
“We must not miss this opportunity to revitalise the economy and open new avenues for diplomacy,” Yoon said.
Additional reporting by Agence France-Presse
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