Tuesday’s vote was largely seen as a verdict on his ousted predecessor’s botched attempt to impose martial law in the longstanding US ally. Lee won the race with 49.4% of the vote, a comfortable victory over the conservative People Power Party’s Kim Moon-soo, though not the landslide that looked possible earlier in the year.
On the campaign trail, Lee said he would use up to 35 trillion won ($33.1 billion) in a stimulus package if elected to provide aid to households and businesses. That was already an increase from the 30 trillion won figure he started the campaign with.
The sense that Lee’s administration will be looser on fiscal policy than Yoon Suk Yeol’s appeared to ripple through bond markets, pushing the price of 10-year futures on government debt down by more than 100 basis points. Still, stock investors cheered the prospect of a return to political stability and corporate governance reforms.
The Kospi Index jumped as much as 2.5% on Wednesday, taking its gain from the April low to more than 20% as investors piled into potential beneficiaries of Lee’s reform and growth agenda.
See also: Trump says US to impose 30% tariffs on EU, Mexico next month
In a speech heavy on rhetoric about uniting the nation, Lee also vowed to continue efforts to step up trilateral cooperation with the US and Japan based on a strong alliance with the US and a practical approach to diplomacy.
But in a departure from the Yoon Suk Yeol administration’s hardline stance on North Korea, Lee said South Korea will seek to restore communication channel with North Korea. Any dialogue would take place from a position of strength he said, adding that South Korea’s defence budget is twice the size of North Korea’s economy.
“No matter how expensive peace is, it is better than war,” Lee said. “It is better to win without fighting than to win by fighting, and the most reliable security comes from a peace without the need to fight.”
See also: Trump threatens 35% Canada tariff, floats higher blanket rates
Demonstrating the pressing security challenges facing the new leader, a top security aide, Sergei Shoigu, to Russian President Vladimir Putin arrived in Pyongyang for talks with North Korea’s Kim Jong Un, Tass reported Wednesday.
Shoigu’s visit, following up on his March trip during which he briefed Kim on US-brokered negotiations to end the war in Ukraine, comes two days after Moscow and Kyiv agreed on a new exchange of prisoners during their second round of peace talks in Istanbul.
Shoigu and Kim are set to discuss the situation around Ukraine and bilateral military ties, including “immortalising” North Korean troops who fought against Ukraine alongside Russian peers, Interfax said.
Kim has emerged as a key ally of Putin since they struck a military treaty last June, and his deployment of soldiers raised concerns about the North Korean military gaining real-world exposure and modern combat experience.
