Former President Yoon’s Arrest Deepens Political Crisis and Social Unrest in South Korea

Yoon Suk Yeol belongs to the ruling conservative People Power Party (PPP). After Yoon’s impeachment and arrest, the PPP experienced some internal divisions, with factions emerging as anti-, non-, and pro-Yoon. Despite the recent political events, the PPP’s approval ratings exceed those of the opposition Democratic Party of Korea (DPK), according to a Realmeter survey. 

However, the country faces a power vacuum. Acting President Choi Sang-mok currently leads South Korea and will oversee a likely snap presidential election within 60 days if the Constitutional Court removes the former leader from office. The opposition party, which had already been in control of the National Assembly prior to the impeachment, continues to dominate the legislative body. The crisis has led to a potential legislative gridlock since major economic and security policies—such as healthcare and labor reforms—remain stalled. The turmoil has also strained relations between the executive and judicial branches. 

While the previous short-lived martial law declaration sparked a period of heightened civil unrest, Yoon's recent arrest has created a subsequent wave of protest activities by the leader’s supporters and counterdemonstrators. In recent days, thousands of activists have gathered at various locations, including prominent court premises and other government buildings. In one notable incident on Jan. 19, protesters stormed Seoul’s Western District Court after a judge extended Yoon’s detention for up to 20 days. The incident left several police officers injured and led to multiple arrests. Further protests are likely to escalate as the Constitutional Court prepares to rule on the impeachment case. 

Some leading experts contend that the arrest has negatively impacted South Korea’s economy. The stock market has become more volatile since the main index dropped sharply following recent events. The Korean won has weakened considerably against major currencies due to the ongoing political situation and pre-existing economic concerns. Consumer confidence has plummeted with reduced spending but saw a slight rebound in January, rising to 91.2 from 88.2 in December 2024. While it marked the first increase in a few months, it remains below an average of 100. Foreign investors have been selling off Korean assets since net outflows have surpassed USD 14 billion since August 2024 and have been further driven by political uncertainties.

The political events surrounding Yoon’s arrest could create some medium-term operational uncertainties for the private sector. It could lead to a temporary contraction in business investment as firms reassess their risk exposure in an unpredictable environment. If the court maintains Yoon’s impeachment, it may result in a temporary recovery of market confidence. However, persistent civil unrest incidents could undermine this stabilization if protests disrupt daily operations. If Yoon is reinstated, increased tensions between his administration and opposition groups could escalate protests and erode investor sentiment.

While South Korea’s democratic institutions have responded swiftly to the crisis, the prolonged political unpredictability and the erosion of public trust will likely exacerbate some operational challenges. Travelers and businesses should prepare for potential disruptions as political instability persists. 

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