[Public Opinion Briefing 94-1] 44.7% Say "Well Done" on Third Anniversary of Inauguration / Fourth Year in Office: The Economy is the Problem!

[Public Opinion Briefing No. 94] EAI · YTN · JoongAng Ilbo · Korea Research Joint Project February Regular Public Opinion Barometer Survey

Evaluation of the President's Third Anniversary and Outlook for the Fourth Year in Office

The Economy is the Problem!

1. 44.7% Say "Well Done" on Third Anniversary of Inauguration / Fourth Year in Office: The Economy is the Problem!

2. Public Opinion on Sectoral Issues / Presidential Approval Rating 45.0%, Preliminary Presidential Candidate Park Geun-hye 36.0%

【President Lee Myung-bak's Three-Year Review】 "Well Done" 44.7% vs. "Poorly Done" 53.6%

President Lee Myung-bak's administration receives more negative than positive evaluations as he approaches his third anniversary on February 25th. "Poorly Done" received 53.6% (37.8% "Not So Well", 15.8% "Not At All Well"), while "Well Done" received 44.7% (8.1% "Very Well", 36.6% "Generally Well"). The approval rating for the administration in February was 45.0%.

Support exceeding 50% was observed among those in their 50s and 60s or older, those with a high school education or less, low-income households earning less than 2 million won per month, and in the Daegu-Gyeongbuk (TK) and Seoul regions. These demographics play a crucial role in bolstering the Lee Myung-bak administration's approval ratings. It is noteworthy that the approval rating for national administration in Seoul has remained high at over 50% since the controversy surrounding the revision of the Sejong City plan in 2010.

[Figure 1] Evaluation of President Lee Myung-bak's National Administration Over His First Three Years by Demographic Group (%)

What is the Sentiment in the Busan-Gyeongnam and Gangwon Regions?

A notable difference exists between the Daegu-Gyeongbuk and Busan-Gyeongnam regions. While Daegu-Gyeongbuk showed the highest national support at 56.4%, Busan-Gyeongnam registered 41.7%, similar to the Chungcheong region (38.8%), which has shown criticism due to the Sejong City issue. It is also important to note the less favorable evaluations of the administration's three-year performance in Busan-Gyeongnam and Gangwon, alongside the Chungcheong region.

The Busan-Gyeongnam and Gangwon regions have traditionally been strongholds for President Lee Myung-bak and the Grand National Party. However, recent elections have shown a strong inclination towards opposition parties in these areas. For instance, the Gyeongnam region was the origin of the pro-Park Geun-hye United Party's surge in the 2008 general elections, and in the 2010 June 2nd local elections, Kim Doo-kwan was elected Governor of Gyeongnam, while in Busan, Democratic Party candidate Kim Jung-kil performed strongly. In Gangwon Province, former Governor Lee Kwang-jae was elected in the June 2nd local elections, indicating recent successes for the Democratic Party and opposition parties.

According to various media reports, analyses suggest that a sense of regional marginalization has intensified under the current administration in these areas. This perceived regional neglect is likely a primary factor contributing to the less favorable evaluations of the president's three-year performance and the strengthening of support for opposition parties in recent elections.

Areas of Success: Diplomacy 23.9% > Economy 18.2% > Inter-Korean Relations 8.6% > Welfare 8.3% > Politics 3.3% > Society 3.2% > Education 3.1%

Areas of Failure: Inter-Korean Relations 23.5% > Economy 19.5% > Welfare 14.7% > Politics 10.9% > Education 7.4% > Society 6.3% > Diplomacy 3.0%

Evaluations of successful and unsuccessful areas over the past three years indicate a more positive assessment of diplomacy and the economy, while inter-Korean relations, the economy, and welfare received more negative assessments. Areas cited as successful were diplomacy at 23.9%, economy at 18.2%, inter-Korean relations at 8.6%, welfare at 8.3%, society at 5.7%, politics at 3.3%, and education at 3.1%. A significant 25.6% responded with "Don't Know/No Answer." Conversely, areas deemed unsuccessful were inter-Korean relations at 23.5%, economy at 19.5%, welfare at 14.7%, politics at 10.9%, education at 7.4%, and society at 6.3%. Diplomacy received the lowest negative rating at 3.0%. "Don't Know/No Answer" accounted for 12.1%. The economy and welfare areas show overlapping positive and negative evaluations.

The successful hosting of the G-20 Summit, leadership in securing overseas nuclear power plant orders, and the recent rescue operation of the MV Edenvale appear to have contributed to a favorable assessment of the president's achievements in foreign relations. However, considering that the public's mandate for President Lee Myung-bak's election in 2007 was largely driven by a desire to revitalize the economy, the economic performance seems to fall short of expectations. While the economy was the second most cited area of success, it was also mentioned as an area of failure by 19.5% of respondents. As will be discussed in more detail later, there are significant signs of distress in the public's perception of the economy, warranting close attention.

Outlook for President Lee Myung-bak's Approval Rating: 20.7% Expect Increase, 42.3% Expect No Change, 34.4% Expect Decrease

The public's outlook for the president's approval rating during the remainder of his term is not optimistic. Only 20.7% expect an increase, while 42.3% anticipate no significant change, and 34.4% foresee a decline.

[Figure 2] President Lee Myung-bak's Successful and Unsuccessful Areas Over Three Years (%)

【Fourth Year in Office Outlook】 The Economy is the Problem - Clear Signs of Distress in Perceived Economy

Failure to Resolve Livelihood Issues Will Hinder Core National Task (Constitutional Amendment/FTA) Progress

[Sign of Distress 1] Public's Top National Priority: "The Economy is the Problem"

National Priorities - Alleviating Economic Polarization 20.7%, Economic Growth 19.0%, Improving Quality of Life 15.9%, National Security 10.0%

The economy was not only a key issue in the 2007 presidential election that brought President Lee Myung-bak to power but remains a critical national agenda item. The current survey results indicate a strong public demand for the administration to focus on resolving economic issues in its fourth year.

First, let's examine the public's priorities for national tasks that the government should focus on in 2011. A significant portion of respondents emphasized the need to address economic disparities and promote economic growth, as well as improve the quality of life directly related to individuals' daily lives. The priorities were: alleviating economic polarization at 20.7%, economic growth at 19.0%, and improving quality of life at 15.9%. National security followed at 10.0%, then national unity at 8.3%, inter-Korean relations improvement at 8.0%, and educational reform at 6.4%. Only 5.1% prioritized political reform, which has been a recent topic of debate.

[Table 1] Changes in Top National Agenda Priorities: Comparison of Survey Results from January-December 2010 (%)

Compared to December last year, public emphasis on "Economic Growth and Quality of Life" has surged; the economy should be the focus of national administration in 2011.

While "National Security/Inter-Korean Relations" issues have decreased, full preparedness for unexpected events caused by North Korea is essential.

In the survey conducted in December of last year, the public's expectation for economic problem resolution was high, but due to the aftermath of the Yeonpyeong Island shelling incident, issues related to inter-Korean relations and strengthening national security received relatively more attention. In the February survey, alleviating economic polarization remained the top priority at 20.7%. The economic growth agenda rose by 7.0 percentage points from 3rd place last month (12.0%) to 2nd place this month. The quality of life agenda, which was ranked 6th in the previous survey (8.9%), rose by 6.0 percentage points to 3rd place this month. Conversely, inter-Korean relations, ranked 2nd in the December survey (14.8%), dropped to 6th place in this survey (8.0%), and the political reform agenda, ranked 7th last month (7.4%), also fell one spot to 8th place (5.1%).

Therefore, while public emphasis on the economic polarization agenda continues, the significant increase in respondents prioritizing economic growth and quality of life agendas since the beginning of 2011 warrants attention. The surge in these agendas as top national priorities may reflect a worsening national and personal economic situation.

[Sign of Distress 2] Worsening Perceived Economy: Similar to the Fifth Year of the Roh Moo-hyun Administration Amidst Economic Crisis Discourse

Sharp Decline in Perceived Improvement of National Economy. Household Economy Evaluation Also Worsened.

[Figure 3] Changes in Perceived National and Household Economy: April 2007 - February 2011 (%)

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Note: [Figure 3] presents a time-series analysis of the perceived changes in the national and personal economic conditions, as surveyed by EAI and Korea Research. It compares the proportion of respondents who indicated improvement versus those who indicated worsening conditions.

Firstly, we can observe that the public's perception of the national economy, which began to slow down in the latter half of 2010, has increasingly worsened since the beginning of 2011.

[Roh Administration's Fifth Year: Economic Crisis Discourse] : Regarding the national economy, in the April 2007 survey, only 9.9% perceived improvement, while 52.4% perceived worsening, a more than fivefold difference. This explains why the Roh Moo-hyun administration was plagued by discourse of an economic crisis throughout its latter half.

[Lee Myung-bak Administration's First Year: Financial Crisis] : The survey around the first anniversary of his inauguration in February 2009 reflects the immediate aftermath of the global financial crisis in late 2008. The proportion perceiving improvement in the national economy plummeted to 1.4%, while the perception of worsening reached a staggering 93.1%. This illustrates the depth of economic pessimism at the time.

[Lee Myung-bak Administration's Second Year: Rapid Recovery] : However, by the latter half of the second year in office, the December survey showed that 14.4% perceived improvement and 36.3% perceived worsening, significantly narrowing the gap. The perceived economic situation was better than during the Roh Moo-hyun administration. This improvement in national economic perception supported the rise in the Lee Myung-bak administration's approval ratings (EAI <Public Opinion Briefing No. 93>).

[Lee Myung-bak Administration's Third Year: Slowing Recovery] : Since May 2010, during the third year of his term, the recovery trend has slowed. In the May 2010 survey, 23.4% perceived improvement, and in the December survey, this figure rose slightly to 25.8%. However, the proportion perceiving worsening also increased similarly from 32.6% to 35.9%. A slowdown in the recovery trend began to emerge.

[Lee Myung-bak Administration's Fourth Year: Transition to Worsening Phase?] : The survey results from February 2011 indicate a transition beyond a slowdown in recovery towards a worsening phase. The perception of improvement in the Korean economy decreased by 7.0 percentage points to 18.8%, while the perception of worsening showed a slight upward trend to 36.1%.

A similar pattern is observed in the perception of the household economy.

[Roh Administration's Fifth Year: Economic Crisis Discourse] : Regarding the household economy, in the April 2007 survey, 10.4% perceived improvement, while 32.54% perceived worsening, more than three times as many. Generally, the perception of the national economy tends to be more pessimistic than that of the household economy.

[Lee Myung-bak Administration's First Year: Financial Crisis] : The February 2009 survey suggests that the global financial crisis had a direct impact on household economies. The proportion perceiving improvement in the household economy halved to 5.8%, while the perception of worsening reached 50.9%.

[Lee Myung-bak Administration's Second Year: Rapid Recovery] : In the December 2009 survey, the proportion perceiving improvement rose slightly to 7.8%, while the proportion perceiving worsening decreased to 33.1%.

[Lee Myung-bak Administration's Third Year: Slowing Recovery] : Since May 2010, during the third year of his term, the recovery in household economic perception has significantly slowed. In the May 2010 survey, 11.5% perceived improvement, and in the December survey, this figure rose slightly to 12.0%. However, the proportion perceiving worsening remained relatively stable, increasing from 26.1% to 26.8%.

[Lee Myung-bak Administration's Fourth Year: Transition to Worsening Phase?] : In the February survey, ahead of the fourth year, the perception of improvement in household economies remained stagnant at 11.0%, while the perception of worsening re-entered the 30% range at 31.0%, reaching a level similar to the fifth year of the Roh Moo-hyun administration.

Perception of the economy is a key variable influencing presidential approval ratings and voting decisions in various elections. Therefore, a shift from a recovering trend to a worsening trend in perceived economic conditions could negatively impact the president's approval ratings. If this trend cannot be reversed, it suggests that managing presidential approval ratings in the fourth year of his term may prove challenging for the Lee Myung-bak administration, despite a steady rise in approval ratings during its first three years.

[Sign of Distress 3] High Pessimism Regarding Resolution of Three Key Livelihood Issues: "Difficult to Resolve in the Near Future" → Leads to Opposition to Constitutional Amendment/FTA

Foot-and-Mouth Disease Outbreak 48.4%, Housing Crisis 63.6%, Inflation 71.0% - Pessimistic Outlook

The survey results on public outlooks for the current livelihood issues of the foot-and-mouth disease outbreak, inflation, and the housing crisis reveal the severity of the current public pessimism.

Regarding the housing issue, characterized by a shortage of Jeonse (lump-sum deposit) housing and rising Jeonse prices, only 1.6% responded that it is "currently being resolved to some extent," and 24.5% believed it would be resolved "soon, although not yet resolved." A pessimistic outlook stating "it will take a long time to resolve" was held by a significant 71.0%. This indicates that the government's housing measures have not inspired much confidence.

For the issue of inflation, referred to as the "inflation crisis," only 1.0% believed it was being resolved, 28.4% expected it to be resolved soon, and 63.6% believed it would take a long time to resolve, similar to the housing issue.

While the foot-and-mouth disease outbreak received a relatively more optimistic outlook compared to the housing and inflation crises, overall, optimism and pessimism were closely matched. 5.1% perceived it as currently being resolved, 43.9% expected it to be resolved soon, and 48.4% believed it would take a considerable amount of time to resolve.

[Figure 4] Outlook for Resolution of Three Key Livelihood Issues (%)

[Policy Implications]

Pessimism about overcoming livelihood issues (jeonse/prices/foot-and-mouth disease) and economic crisis is increasing; public opposition to government policies (constitutional amendment/FTA, etc.) is also rising.

Pushing for constitutional amendment amidst the jeonse/price crisis carries a high risk of backlash.

The analysis results confirm that when public pessimism regarding livelihood issues directly affecting people's lives is severe, it poses a significant obstacle to the government's core policy agenda. For issues like jeonse and prices, which are pressing livelihood concerns and whose resolution prospects are viewed as uncertain by the public, opposition to core government policies such as constitutional amendment or the Korea-US FTA increases as the difficulty of resolving these issues is perceived to be greater.

In other words, if livelihood issues are not resolved, it is difficult to gain momentum for national-level core agendas. Conversely, this implies that pushing forward with the government's priorities without addressing these issues may result in significant public backlash.

Impact of Jeonse Market Outlook on Perceptions of Constitutional Amendment and Korea-US FTA

Examining the impact of perceptions of the jeonse market on constitutional amendment, a core national task pursued by the current president and government, reveals that among respondents who believe the jeonse issue is 'currently being resolved,' 87.5% strongly agree with the government's position to 'pursue constitutional amendment within this year.' Among those who believe 'it has not been resolved but will be resolved soon,' the proportion agreeing to pursue constitutional amendment within this year drops to 59.6%. However, among the pessimistic group who believe 'it will take a long time to resolve,' only 47.0%, less than half, agree to pursue constitutional amendment within this year.

Regarding the Korea-US FTA, 75.0% of those who believe the jeonse issue is currently in the resolution phase responded that 'the Korea-US FTA should be implemented promptly.' In contrast, among those who believe it will be resolved soon, the proportion agreeing to prompt implementation is 68.3%, and among those who believe it will take a long time to resolve, the proportion agreeing to prompt implementation of the Korea-US FTA is relatively lower at 64.2%. This indicates that pessimistic perceptions of livelihood issues, such as the jeonse market, are highly correlated with public opposition to major government policies.

[Figure 5] Public Support for Constitutional Amendment and Korea-US FTA by Perception of Jeonse Market Issues (%)

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Impact of Economic Crisis Outlook on Perceptions of Constitutional Amendment and Korea-US FTA

Beyond individual livelihood issues, the overall outlook on overcoming the economic crisis also significantly influences perceptions of core government policies such as constitutional amendment and the Korea-US FTA. Among those who believe the economic crisis is being overcome within this year, 59.0% support the government's proposal to pursue constitutional amendment within this year. This figure drops to 52.6% among those who believe it will be overcome soon, and only 46.2% among those who believe it will take a long time.

Among those most optimistic about overcoming the current economic crisis, 88.1% support the prompt implementation of the Korea-US FTA. This proportion is 67.1% among those who believe it will be overcome soon, but significantly drops to 55.9% among those who believe it will take a long time.

This also suggests that the current livelihood issues and economic conditions are likely to hinder the government's pursuit of political and ideological issues that can inevitably cause domestic political conflict, such as constitutional amendment or the Korea-US FTA. Furthermore, the results indicate that it is difficult to unilaterally push forward with issues like constitutional amendment or the FTA when the public perceives that various livelihood issues, including jeonse, prices, and foot-and-mouth disease, are difficult to resolve and that overcoming the economic crisis is not easy.

[Figure 6] Public Support for Constitutional Amendment and Korea-US FTA by Perception of Economic Crisis (%)

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