The Impact of Martial Law and the Jeju Air Tragedy on the South Korean Economy. Jeongmin Yoon, Economist (Intern) Incheon National University.
In December 2024, South Korea faced an unprecedented dual crisis: political instability triggered by President Yoon Suk-yeol’s imposition of martial law, and the tragic crash of a Jeju Air passenger plane. These events together precipitated significant disruptions across key economic indicators, notably exchange rates and the stock market. This study examines the economic fallout from these crises and proposes policy recommendations to facilitate recovery and strengthen economic resilience. The declaration of martial law severely undermined the stability essential for economic functionality. The announcement prompted a sharp depreciation of the Korean won, as foreign investors reassessed the country's political risk, leading to substantial capital outflows. This depreciation weakened the won against the U.S. dollar, creating a mixed economic impact. While a weaker currency offered temporary advantages for export-oriented industries, Korea’s heavy dependence on imported raw ma...