South Korean Parliament Impeaches Acting President Han Duck-Soo Amid Escalating Political Crisis

South Korea plunged deeper into political chaos on Friday as parliament voted to impeach Prime Minister and Acting President Han Duck-soo, just two weeks after impeaching President Yoon Suk Yeol over his short-lived emergency martial law stunt.

South Korea’s parliament voted with 192 lawmakers to impeach Han, exceeding the critical 151-vote majority in the 300-member legislature. This now means Finance Minister Choi Sang-mok will serve as acting president. 

“I announce that Prime Minister Han Duck-soo’s impeachment motion has passed. Out of the 192 lawmakers who voted, 192 voted to impeach,” said National Assembly Speaker Woo Won-Shik.

South Korea’s acting president Han Duck-soo has also been impeached. Read more: https://t.co/QByIlUw7mA pic.twitter.com/WYfPB1CEN8

— South China Morning Post (@SCMPNews) December 27, 2024

Han’s sudden ouster comes several weeks after Yoon’s December 3 martial law decree, which lasted only six hours—one of the shortest martial law periods in the country’s history. Nevertheless, it sparked mass protests and now worsening political turmoil.

Reuters noted the imposition of martial law earlier this month “sent shockwaves through Asia’s fourth-largest economy, and drew concerns from allies in the United States and Europe who had seen Yoon as a key partner in efforts to counter China, Russia and North Korea.” 

Finance Minister Choi released this statement: “The government must do its best to ensure that the people do not become anxious, or the security of the country and people’s daily lives are not shaken.” 

Goldman previously told clients that the Constitutional Court has six months to uphold or reject the impeachment vote. The court has stated that Yoon’s case will be a “top priority,” along with other impeachment cases.

On Friday, Goldman’s David Kim and Chris Cha provided clients with a market wrap of how the latest political turmoil impacted domestic markets:

KOSPI traded lower as the index saw joint net foreign & local insto selling. The index saw deeper losses as the session progressed and at one point dropped below 2,400 following the sharp mid-day KRW depreciation to as low as W1,485 due to more political instability after the Democratic party reinforced their decision to impeach the interim president / PM Han Duck Soo after he declined to appoint 3 judges to the Constitutional Court. Outflows were scattered across sectors today on year end ex-div for some names as well, but foreigners ended the day as main net buyers of KOSPI Tech & Service (Internet). Turnover was -29% vs the recent 20 day average.

The KOSPI is attempting to hold support. A failure at this level would likely result from escalating political turmoil combined with mounting economic headwinds.

Shin Yul, a political science professor at Myongji University, told Reuters that South Korea could plunge into an economic crisis comparable to the one in the late 1990s on top of its ongoing political turmoil.