# Democratic Party’s Lee Jae-myung Secures Presidential Victory

Lee Jae-myung of the Democratic Party clinched a win in the 21st Presidential Election, garnering 49.42% of the votes and surpassing Kim Moon-soo of the People Power Party, who attained 41.15%, by approximately 2.89 million votes. Lee Jun-seok from the Reform Party secured 8.34% of the votes.

The President-elect emphasized a three-phase policy vision under ‘Recovery, Growth, and Happiness,’ aiming to stabilize the economy, secure growth drivers, and establish a basic social foundation. According to a report by law firm Sejong titled “21st Presidential Election: Results and Implications,” these initiatives encompass government restructuring, industrial strategy reassessment, an economy reoriented around new industries, and enhancement of the social safety net. Below is a detailed summary of the new administration’s comprehensive policy directions based on Sejong’s report.

# Government Reorganization: Signaling an ‘Economy-Centric Adjustment’ and ‘Climate Leadership’

Unlike the Moon Jae-in administration’s transition committee, the new government will establish the National Policy Planning Advisory Committee to set 100 key national tasks. This committee will operate for 50 days, under the direct supervision of the President, to create a roadmap for national governance through comprehensive reports and consultations from all ministries.

President Lee has pledged a functional overhaul of government organizations. Prominent plans include strengthening the coordination function of the Ministry of Strategy and Finance, separating its direct execution role, and creating a Climate and Energy Ministry to oversee energy transition and carbon neutrality policies. Additionally, the Ministry of Gender Equality and Family will be expanded and converted into the Ministry of Gender Equality and Family Affairs.

# Focus on ABCDEF Industries: Nurturing Emerging Industries with a 100-Trillion-Won Public Fund

The cornerstone of Lee’s industrial policy is the ‘ABCDEF growth strategy,’ focusing on six strategic industries: Artificial Intelligence (AI), Biotechnology (Bio), Content (Contents), Defense (Defense), Energy (Energy), and Manufacturing (Factory). These sectors will be nurtured as the next-generation growth engines, funded by a 100-trillion-won public fund.

Policies aimed at strengthening supply chain resilience will also be implemented. These include fostering self-reliance in materials, parts, and equipment (SoBuJang), diversifying key mineral supplies, and establishing a supply chain stabilization fund. A control tower for economic security will be set up to prepare for global uncertainties. Additionally, preemptive industrial restructuring, digital transformation, and integration with carbon neutrality are set as key elements for existing flagship industries like steel and petrochemicals.

# Fair Trade and Labor Policies: Strengthening Market Discipline and Workers’ Rights

The new administration will enhance fair trade regulations, focusing on the platform ecosystem. Key measures include imposing a cap on online platform fees, banning in-app payment systems, regulating dark patterns, and securing rights for small business owners on platforms. Notably, granting negotiation rights and collective bargaining rights to platform workers could significantly impact contractual structures within related industries.

In labor policies, dramatic changes are anticipated, including a complete ban on the comprehensive wage system, the introduction of a 4.5-day workweek, and a gradual extension of the retirement age to 65. The ‘Basic Law on Workplace Rights’ will strengthen the legal status of platform and freelance workers.

# Digital Assets and Financial Regulations: Advancing Institutionalization and Global Integration

The embryonic ‘second stage legislation’ concerning digital assets will be initiated, creating a comprehensive system covering issuance, distribution, business registration, and supervision. The government aims to incorporate digital assets into the formal financial system and accelerate the institutionalization of token securities, virtual asset ETFs, and stablecoin regulations.

Additionally, financial market policies will improve financial accessibility by expanding internet banks, revamping inclusive finance systems, and increasing mid-interest-rate loans. Conversely, stricter regulations such as punitive fines for financial incidents and heightened managerial responsibilities may also be implemented.

# Policy Execution: Leveraging Legislative Dominance for Fast-Paced Reforms

The Democratic Party’s majority in the National Assembly is the new administration’s strongest driving force. Previously vetoed laws, such as corporate law amendments, the Yellow Envelope Act, and the Local Currency Act, are likely to be reintroduced.

Thus, corporations and industries must conduct thorough analyses of the legislative and administrative environment that will evolve in the next six months and execute proactive measures. Establishing communication channels to reflect industry opinions in the selection of national tasks and simulating anticipated legislative changes are necessary steps.

# Foreign and Security Strategy: Pragmatic Diplomacy and Multilateral Cooperation

The Lee administration will adopt a ‘pragmatic and national interest-oriented diplomacy,’ transcending traditional factional confrontations. By maintaining strategic balance between the U.S. and China, the new government will push for expanded multilateral security cooperation, supply chain diplomacy, and the reactivation of the Korean Peninsula peace process.

The initiative to establish an ‘Asian Supply Chain Union’ and conduct high-level economic and technological dialogues with China concurrently with separate security cooperation with the U.S. and Japan reflects a pragmatic aspect of its diplomatic strategy. Relations with Japan are expected to improve via resolutions for forced labor issues and bilateral summit meetings.

North Korean policy will maintain the Moon administration’s framework but emphasize effectiveness. Gradual implementation of inter-Korean agreements, economic cooperation corresponding to denuclearization, and the restoration of military tension reduction measures will be sequentially addressed. Legislative priorities will include the North Korean Leaflet Ban Act and the Family Reunion Act.

# Energy Transition Policies: Establishing the Ministry of Climate and Energy and Advancing Decarbonized Industry

Energy policies will simultaneously address climate crisis response and industrial transformation. Central to this effort is the formation of the Ministry of Climate and Energy, which will oversee greenhouse gas reduction targets, energy mix transitions, the spread of renewable energy, and energy welfare policies.

Key targets for achieving carbon neutrality include stable utilization of nuclear power, attaining a 35% renewable energy generation share by 2030, expansion of energy storage systems (ESS) and smart grids, and the proliferation of electric and hydrogen vehicle charging infrastructure. Phasing out coal-fired power plants and creating a green fund to reduce corporate compliance costs under the emissions trading scheme are also in planning.

Corporate ESG management will be reinforced, with new regulations likely mandating the publication of sustainability reports, applying accounting standards with climate risk assessments, and expanding the disclosure of industrial carbon information. Additionally, incentives to promote RE100 participation and green finance activation are under consideration.

# AI and Data Policies: Instituting an AI Basic Law and Strengthening Data Sovereignty

The new administration plans to significantly overhaul national strategies for AI and data, critical for digital transformation. The enactment of the ‘AI Basic Law’ will establish a national policy framework for AI technology development, safety assessments, and public AI applications.

To ensure the public nature of the AI ecosystem, the government will promote comprehensive public data disclosure, establish a National AI Ethics Committee, and introduce an AI impact assessment system. Domestic AI applications will be mandated for public sectors such as defense, healthcare, and administration, bolstered by policies for digital education to cultivate AI expertise.

In terms of data sovereignty, the administration will pursue ‘MyData 2.0,’ expand specialized data integration institutions, and encourage the opening of public institution data to private sectors, presenting a regulatory easing direction for digital-asset-based industries. Tax incentives will be offered for attracting private cloud services and data centers.

Expansion of on-chain data authentication systems linked to blockchain technology may also be included in the policy discussion, facilitating convergence with multiple industries including finance, logistics, and distribution through the institutionalization of virtual assets and STOs.

# Social Welfare and Basic Society: Shifting from ‘Basic Income’ to Reinforcing Universal Welfare Systems

In welfare, the most notable reform is the ‘Basic Society’ concept anchored on ‘basic income.’ President Lee has pledged to create a system that ensures basic living standards for citizens through the expansion of universal welfare and nationalization of public services.

Specific policies include raising the basic pension to 400,000 won, expanding child allowances, extending free medical services (especially for children’s and adolescent health), and increasing public housing. In housing, long-term public rentals and expanded support for youth housing guarantees will be parallel initiatives.

Significant changes in childcare and education policies are also anticipated. The government plans to implement ‘National Responsibility for Childcare from Age 0 to 5,’ expand free meals in kindergartens and elementary schools, provide free high school education, and offer support to close educational gaps.

Elderly welfare will also be strengthened. Policies to increase senior employment, activate silver industries, and publicize caregiving services will be executed in conjunction with an extended retirement age of 65.

# Policies for SMEs and Small Business Owners: Enhancing Self-resilience and Ensuring Fair Competition

Policies for SMEs and small business owners focus on enhancing self-resilience and ensuring a fair competitive environment. Recovery policies for small business losses due to COVID-19 include direct support through supplementary budgets and indirect support measures such as incentivizing rent reductions, lowering policy loan interest rates, and digitizing traditional markets.

Addressing technological appropriation from SMEs is also a key agenda. Reinforced ‘Technology Data Protection Laws,’ expanded punitive damage compensation systems, and shifting the burden of proof are examples of institutional safeguards. The full-scale implementation of a delivery price linkage system and strengthened follow-up inspection systems for unfair subcontracting practices are anticipated.

Particularly, measures to ensure fairness within the platform ecosystem will directly impact entrants. Discussions include capping commission fees for entrants, ensuring transparency in advertising fees, prohibiting mandatory in-app payments in app markets, and establishing an organization registration system for small business owners, which could significantly alter the digital retail structure.

# Youth and Startup Development: A Triad Framework of Innovation, Asset Formation, and Social Safety Nets

Youth policies are categorized into social entry support, asset formation, and startup fostering. Employment policies will introduce a ‘National Responsibility System for Youth Employment,’ expanding public sector hiring and providing incentives for private sector youth employment. Direct income support measures will include expanding the Youth Tomorrow Filling Deduction and establishing Youth Service Allowances.

Asset formation policies include youth basic savings accounts (installment public funds), expanded youth rental support, and the supply of hope housing for youths. The ‘Youth Leap Account’ aims to support asset formation integrally with financial literacy education and credit recovery support.

For startups, policies will focus on nurturing tech-based startups and expanding tax benefits for startup companies, alongside a strategy for scaling up the startup ecosystem overall. Initiatives include increasing the size of the parent fund, establishing regional startup venture funds, and enhancing the guarantee ratio of tech-based startups in AI, bio, and fintech through the Korea Technology Finance Corporation.

# Real Estate Policies: Public-Led Supply and Regulatory Relaxation for Genuine Residents

President Lee’s real estate policy emphasizes ‘public-led housing supply,’ with plans to provide more than half of the 3 million homes planned as public rentals. In addition to existing public rentals for youth and newlyweds, the government will introduce long-term public rental housing and a priority supply system for those who have been without housing for over 30 years.

Financial regulations for real end-users will also be relaxed. Measures include raising the LTV limit to 80% for first-time homebuyers, preferential terms for the Bogeumjari Loan for youth and newlyweds, easing comprehensive real estate tax for the homeless, and reducing property taxes for long-term single-home owners. In contrast, tax rates for multi-homeowners and speculative property holders may be tightened.

Policies to stabilize jeonse (leasehold deposit) and monthly rents will include expanding the current rent ceiling system, extending tenant renewal request rights, and introducing standard rental prices. Public mediation platforms and expanded scope for rental price statistics disclosure will be implemented to protect tenants.

# National Finance and Revenue Restructuring: Emphasizing Efficiency Over Tax Increases

Fiscal policies will differ from the previous government’s ‘tax first, welfare later’ approach, focusing on restructuring fiscal spending and expanding the tax base. President Lee’s administration has vowed to maintain the national debt ratio below 60%, reinforce fiscal rules, and manage the consolidated fiscal balance deficit, emphasizing ‘responsible welfare.’

Regarding tax restructuring, the administration favors maintaining high tax rates for large corporations and high-income earners temporarily, restructuring tax benefits rather than raising corporate taxes, and refining tax deductions and exemptions. Concurrently, policies to curb tax avoidance by platform companies and global IT giants with a digital tax and measures to enhance fairness in asset gains taxation are expected.

Simplifying the income and corporate tax structure, strengthening the tax expenditure budget to increase predictability in revenue, adjusting national and local taxes, and reforming the integrated financial system will also be discussed.

# Regulatory Innovation and Digital Administrative Reform: Implementing a ‘Platform Government’

The regulatory innovation policy will introduce a ‘regulation total amount system’ and a model based on ‘private autonomy and public responsibility.’ The regulation total amount system sets reduction targets for each ministry and requires the disclosure of specific cost estimates when new regulations are established. The plan focuses on improving unfair regulations for innovative businesses, especially in technology-regulating ministries such as the Ministry of Trade, Industry and Energy, the Ministry of Science and ICT, and the Fair Trade Commission.

In digital government, the ‘platform government’ concept will be actualized, with initiatives including integrating all administrative services into a single app, distributing mobile IDs and digital wallets, establishing cloud-based AI administrative systems, and expanding online platforms for public participation. Efficiency in administrative processes is anticipated to increase significantly with the introduction of services like AI-based disaster prediction and response systems, automatic civic applications, and AI-powered chatbot administration.

Public institution restructuring and organization efficiency will also be pursued concurrently. Initiatives include integrating overlapping functions of public institutions, linking budget allocations with performance evaluations, and developing a roadmap for functional adjustments.

# Education Policies: Expanding National Responsibility and Comprehensive Digital Learning Infrastructure

The core of President Lee’s education policy is establishing a ‘public education system that the state is responsible for until the end,’ aiming to provide universal public childcare and education from birth to age 18. Plans include extending public care hours for young children to elementary lower-grade students and operating in-school care classrooms until 8 p.m.

Enhanced digital learning support aims to close educational gaps by providing all students with learning tablets and internet support and implementing AI-customized education systems. Digital learning districts and infrastructure upgrades in rural schools, alongside open-source platforms and educational resources for teachers, are also part of the broader strategy.

Reforms for the education evaluation system are under consideration, including comprehensive implementation of high school credit systems, simplifying college admissions, integrating regular and rolling admissions, and developing public AI-based college entrance support systems to reduce dependency on private education.

# Content and Cultural Industry Policies: Promoting Global IP and Protecting Creators

The new government identifies the K-content industry as a strategic export sector. Plans include investing national funds and subsidies into various fields such as games, webtoons, OTT services, e-sports, and digital art, aiming to establish Korea as a global IP powerhouse. Strategies for fostering the content industry include supporting global market expansion, providing tax credits for production costs, and enhancing the negotiation power of small production companies through support for collective frameworks with foreign OTT platforms.

Expanding the social safety net for cultural and artistic workers will also be promoted, featuring a welfare platform for creators, expanded employment insurance for artists, and stronger copyright protections. Additionally, infrastructure expansion based on local cultural centers, public libraries, and increased support for regional broadcasting stations are being reviewed.

# Regional Balanced Development: Implementing ‘Region-Led National Strategic Projects’ Across Five Zones

President Lee’s flagship policy for regional balanced development aims to bridge the gap between the capital and non-capital areas through the ‘Ultra-Wide Megacity Project.’ This project will distribute strategic industries across five major zones—Gyeongnam, Busan, Ulsan, Chungcheong, Jeolla, Daegu, Gyeongbuk, and Gangwon—and provide comprehensive infrastructure, financial, and administrative support accordingly.

Additionally, the government will expand the autonomous fiscal ratios of local governments using the Special Account for Balanced National Development, elevate mandatory local talent recruitment, and focus investments on advanced departments within regional universities. Discussions on the second phase of public institution relocation to regional areas are also expected to restart.

# Public Reform and Administrative Safety: Performance-Oriented Restructuring and Strengthening Fiscal Integration

Public sector reform, characterized by ‘responsibility and efficiency,’ will include consolidating inefficient functions, strengthening local public institution management, tightening head public institution appointment verifications, and reforming the public institution performance evaluation system.

Public official system reforms will be implemented, with plans to reduce the hiring of ninth-grade public servants and introduce performance-based evaluations. This aims to foster a culture centered on practical capabilities within the public service and encourage the entry of private sector experts into public domains.

In safety, the government will promote the integration of social disaster response systems, creating a government-wide integrated disaster information platform, AI-based disaster prediction and response systems, and establishing regional safety plans that incorporate citizen participation.

# Digital Sovereignty and Cybersecurity: Securing Domestic Infrastructure

Efforts to secure digital sovereignty will reinforce technological and policy infrastructures. Plans include increasing the use of domestic cloud services, setting targets for the localization of data centers, and advancing national AI semiconductor projects.

Cybersecurity strategies will establish a national ‘cyber crisis alert system’ and develop a continuous joint response framework connecting public institutions and private sectors. Establishing a digital defense academy to respond to issues like data leaks and AI misuse is also under discussion.

To secure regulatory authority over foreign IT platforms, the administration plans to introduce a ‘digital tax’ and a ‘domestic corporate registration system.’ These measures aim to ensure tax revenue from global big tech companies operating domestically and strengthen their responsibility toward user protection.

# Citizens’ Participation Policies: Broadening Digital Citizen Engagement Platforms

To reinforce participatory democracy, President Lee’s government will expand digital channels for public policy participation. The administration plans to establish an online agora platform for constant legislative and administrative opinion gathering and upgrade the digital petition system.

A comprehensive digital citizen participation portal will integrate mobile voting, policy surveys, and local opinion polls, enhancing trust and participation in governance and achieving a citizen-oriented governance model.