Upcoming summit with North could make or break S. Korea

SEOUL, South Korea – South Korean President Moon Jae-in has more than world peace riding on a successful summit with North Korean leader Kim Jong-un this coming week: His domestic agenda is also at stake.

Moon’s trip to North Korea’s capital – the first such visit by a South Korean leader in 11 years – will again test his ability to bridge the gap between two volatile leaders, Kim and US President Donald Trump. It may also help South Koreans forget about soaring home prices and unemployment that have brought his sky-high approval ratings down to earth.

South Koreans see Moon’s dovish North Korea policy as a success, beginning with the rapprochement forged with Kim at an April summit at the country’s border. That was followed by other initiatives, including a new liaison office with the North and reunions of families separated by the Korean War.

But the goodwill generated from his North Korea meetings has been eroded by an economic slump. Home prices are becoming out of reach for Seoul’s middle class, and unemployment in August rose to its highest level in more than eight years.

This is Moon’s “first political crisis,” said Lee Eun-young, head of the Korea Public Opinion Lab. “Depending on what the government’s goal from the summit is, it could make or break his presidency,” she said.

Frustration with the economy has led South Koreans to draw unfavorable comparisons between Moon’s policies and the struggles of his mentor and former boss, the late President Roh Moo-hyun. He led the country from 2003 to 2008 and was the last South Korean leader to visit Pyongyang.

Moon has often cited Roh as the inspiration behind his own bid for the presidency, and was his chief of staff. He has said he wouldn’t repeat the economic mistakes that plagued Roh’s presidency, notably a failure to control skyrocketing housing prices that jumped almost 60%, or to reform powerful family-owned conglomerates known as chaebol.

But now similar domestic troubles are hitting Moon. The median price of a Seoul apartment jumped to $700,000 as of August, 20 percent higher than a year earlier, according to KB Kookmin Bank. Seoul’s younger families are once again being forced out of the market, lamenting their inability to buy apartments as prices outpace what they can save.

“There is a disappointment from people who have believed Moon’s administration would improve the economy,” said Kim Jinpyo, a lawmaker in the ruling party who was a finance minister under Roh. “Rather than seeing an improvement, life for small-business owners and low-income people got worse.”

So far, Moon’s administration hasn’t been able to stem the real estate surge in greater Seoul, home to about half of the country’s population, despite having announced measures intended to cool the property market eight times since taking office in May 2017.

In Pyongyang, things won’t be easy for Moon. He will look to salvage faltering negotiations between Trump and Kim over nuclear weapons, while working to further the prospects of a peace deal between them by the end of this year. Moon and the US president will meet next week in the US – with Moon potentially delivering a message from Kim.

(Bloomberg News/TNS)