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First liberal rule in decade unlikely to bring swift changes in South Korea

[May 15, 2017] By Christine Kim and Cynthia Kim

SEOUL (Reuters) - South Korea's new liberal President Moon Jae-in promised to seek a parliamentary review of a controversial U.S. anti-missile defense system. If the vote were held today, the deployment would likely be endorsed in the legislative body controlled by conservative and moderate politicians.

More importantly, pushing for that motion would strain Moon's already fraught relations with the opposition, whose cooperation is essential on a more urgent policy goal: creating hundreds of thousands of jobs in a country where youth unemployment is near an all-time high.

Despite the election of the first liberal president in South Korea after nine years of conservative rule, sweeping policy changes on the left are almost untenable in the divided National Assembly, where Moon's Democratic Party holds only 40 percent of the 299 seats.

Moon's first 100 days in office will likely focus on pushing economic reforms that have broad consensus across the political spectrum, political experts say.

While Moon has promised a shake-up of South Korea's powerful family-run conglomerates, lawmakers would likely support more modest changes, such as ending the practice of pardoning convicted corporate criminals, given the outsized importance of chaebols to Asia's fourth-largest economy.

Kang Dong-wan, a political science professor at Dong-A University in Busan, saw "a good chance of a very messy parliament" unless Moon uses a "give-and-take" approach with other parties.

During the campaign, Moon criticized the previous government of impeached leader Park Geun-hye for agreeing to host the Terminal High Altitude Area Defence (THAAD) system without seeking parliamentary approval.

He also promised to reopen the Kaesong Industrial Zone just north of the militarized border with North Korea, a joint economic cooperation project Park scrapped in 2016 after the North fired a long-range rocket.

But these pledges have drawn fierce criticism, unlike his other goals -- creating jobs, raising the minimum wage, reforming conglomerates, and setting up a body to investigate corruption by high-ranking public officials.

(For Moon's main election pledges, click)

"Moon will first have to tackle issues which have some kind of common ground among political parties and the public, not divisive issues such as THAAD," said Kim Jun-seok, a political science professor at Dongguk University.

DEPLOYING THAAD

Underscoring the dilemma for Moon, North Korea on Sunday fired a ballistic missile in defiance of calls to rein in its weapons program, only days after he took office pledging to engage the North in dialogue.

Backing away from his THAAD pledge could ease tensions with Washington, though it does risk alienating Beijing, which considers THAAD's powerful radar a threat to its own security.

"Unless Moon is out of his mind, he shouldn't continue to drag on with the THAAD issue. He really can't oppose it anymore," said Hong Moon-jong, a member of the conservative Liberty Korea Party, the second-largest party with 107 seats, behind the 120 seats held by the ruling party.

Two other major opposition parties, the centrist People's Party and the conservative Bareun Party that together have 60 seats, also support the deployment.

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Newly elected South Korean President Moon Jae-in takes an oath during his inauguration ceremony at the National Assembly in Seoul, South Korea, May 10, 2017. REUTERS/Ahn Young-joon/Pool/File Photo

If the new administration wants to work with the opposition, Moon should focus on creating jobs instead, which the Liberty Korea presidential candidate had also promised, Hong said.

In fact, Moon's first executive action was to create a presidential "jobs council" tasked with implementing his promise to create 810,000 public-sector jobs over his single five-year term.

Officials have started drafting a supplementary budget, worth as much as 10 trillion won ($8.95 billion) that will pay for new jobs, people involved in the effort told Reuters. It requires parliamentary approval.

Also high on his list: increasing the minimum wage to 10,000 won ($8.83) an hour by 2020, from 6,470 won and cutting working hours to about 1,800 a year, from an average of 2,113 as of 2015. Parliament also has to approve such changes.

TAMING PARLIAMENT

South Korea's National Assembly has a long history of physical scuffles. One lawmaker famously set off a teargas canister to thwart a bill in 2011. It passed anyway.

The so-called parliament advancement law, which requires three-fifths of all lawmakers to approve disputed bills, was created in 2012 to civilize debate and prevent the largest parties from railroading bills through.

While the law refined parliamentary proceedings, it also prevented Park's government from passing any major legislation despite her Saenuri Party holding a majority.

Even before her party lost its majority in the April 2016 election, Park's package of four bills, introduced in 2015 to reform South Korea's rigid labor market, never passed. The labor reform bills were central to her election pledges of boosting economic growth to 4 percent.

Opposition parties in parliament also blocked Park's other election promises, including easing regulations for the services sector to boost investment.

"The previous Park Geun-hye administration tried all it could to make things possible without parliamentary approval as it was not friendly with parliament, but it got little done," said a senior government official tasked with creating new policies in the Moon administration.

With most major reforms requiring a super-majority of 60 percent to pass in parliament, Moon has acknowledged bipartisan unity will be key to his success. He spent a large part of his first day in office meeting with opposition leaders and requesting their cooperation.

(Additional reporting by Ju-min Park, Editing by Soyoung Kim and Bill Tarrant)

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