Yoon’s signature industrial policies at risk
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When President Yoon took office, one of his top priorities was revitalising the nation’s nuclear power industry.
PHOTO: AFP
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SEOUL - South Korea’s political crisis, triggered by President Yoon Suk Yeol’s short-lived martial law declaration
The initiatives facing increased uncertainty include a multibillion-dollar nuclear power deal in the Czech Republic and the Donghae deep-water gas field development.
The instability comes at a critical moment for South Korea, as shifting global dynamics – including Donald Trump’s return to the US presidency
Czech nuclear power plant project faces uncertainty
When President Yoon took office, one of his top priorities was revitalising the nation’s nuclear power industry.
The sector had been significantly weakened under former president Moon Jae-in’s administration, which pushed a strong anti-nuclear policy.
Mr Yoon’s administration reversed course, restarting halted domestic reactor construction projects and extending the operation of ageing plants.
On the international front, Mr Yoon sought to position South Korea as a global leader in nuclear power. The government secured its spot as the preferred bidder for a 24 trillion won (S$22.66 billion) nuclear power plant project in the Czech Republic, with plans to export a total of 10 nuclear reactors by 2030.
Mr Yoon himself travelled to the Czech Republic to personally promote South Korea’s nuclear technology and reliability, marking the deal as a cornerstone of his economic vision.
However, the ongoing impeachment proceedings have raised doubts about the future of these initiatives.
“The entire sector, from project funding to international contracts, depends heavily on government policy,” an industry official said on condition of anonymity.
“With the President’s term now uncertain, the outlook is grim.”
The Czech nuclear project, in particular, faces increased scrutiny. The Czech Republic is set to finalise its contractor selection in March 2025, but lingering doubts about South Korea’s policy stability could jeopardise the deal.
During the bidding process, Czech officials had expressed concerns about the potential for South Korea to revert to a denuclearisation policy if the political winds shift.
Daewoo Engineering & Construction, the construction contractor for the Czech project, downplayed the immediate impact of the impeachment.
“This is a long-term project that the Czech government has been planning for six years,” a Daewoo representative said.
“While the political situation in Korea is a factor, we believe the Czech government will evaluate the bid on its merits.”
Experts are less confident.
Nuclear engineering professor Park Jong-woon, a former researcher at Korea Hydro & Nuclear Power, believes the deal is on shaky ground.
“Even without the impeachment, the project faced hurdles due to Westinghouse’s intellectual property disputes and South Korea’s declining competitiveness in the global nuclear market,” he said.
“This project is likely to be abandoned no matter what. (South) Korea should focus on maintaining its existing reactors rather than pursuing unprofitable export deals.”
US nuclear power company Westinghouse had protested against alleged violations of its intellectual property rights in South Korea’s bid to construct nuclear reactors in the Czech Republic.
Donghae gas field project stalls
President Yoon’s domestic energy ambitions are also faltering. The Donghae gas field development project, announced in June as a key step towards energy security, has already faced fierce resistance from the opposition party.
In November, the Democratic Party slashed the project’s 49.7 billion won budget for 2025, effectively freezing its progress.
Officials at the Korea National Oil Corporation (KNOC), which oversees the Donghae project, are concerned.
“Internally, there’s growing fear that this project could be cancelled (if the President is impeached),” a KNOC insider said.
Trade policies in limbo
The latest political crisis could not come at a worse time for the country’s global trade strategy.
On Jan 20, Donald Trump will begin his second term as US president, raising concerns about heightened protectionist policies, including tariffs on key trade partners.
South Korea faces a narrow window of opportunity to prepare for the changing US policy landscape, but the impeachment proceedings and the resignation of key Cabinet members are leaving the government ill-equipped to respond.
Mr Yoon’s Cabinet has been thrown into disarray.
Key figures, including Trade Minister Ahn Duk-geun, have already offered their resignations amid the impeachment crisis.
Professor Huh Yun, a trade expert at Sogang University and chair of the Trade Policy Advisory Committee, emphasised the urgency of resolving the political turmoil.
“The first few months of the next US administration will be crucial for shaping global trade policies,” Prof Huh said.
“If Korea fails to respond strategically during this window, we risk losing influence in key negotiations. Political instability at home will only weaken our bargaining position on the global stage.” THE KOREA HERALD/ASIA NEWS NETWORK
