South Korea president's party wins vote, green light for economic reforms

SEOUL Wed Jul 30, 2014 11:48am EDT

South Korean President Park Geun-hye delivers a speech during a ceremony marking Korean Memorial Day at the National Cemetery in Seoul June 6, 2014.  REUTERS/Jung Yeon-je/Pool

South Korean President Park Geun-hye delivers a speech during a ceremony marking Korean Memorial Day at the National Cemetery in Seoul June 6, 2014.

Credit: Reuters/Jung Yeon-je/Pool

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SEOUL (Reuters) - South Korean voters in 15 districts gave President Park Geun-hye's ruling party an enhanced parliamentary majority in by-elections on Wednesday, and the political momentum to drive an economic stimulus program and regulatory reforms.

Park has made the economy a priority in the second year of her five-year term and recently appointed a finance minister with a brief to stimulate consumption and ease restrictions on the sagging property market in Asia's fourth largest economy.

The government came under fierce criticism for what was seen as an inadequate and slow response to the sinking of a ferry in April that killed 304 people, mostly children on a class trip. It was the country's worst maritime disaster in 44 years.

But Park's Saenuri Party candidates won in 11 of the 15 constituencies up for grabs, according to the National Election Commission, boosting the conservative representation in the unicameral 300-seat assembly to 158. The party previously held 147 of 285 seats.

The strengthened majority gives the government a clearer mandate for reform. Much of the government's economic stimulus program does not need approval by parliament, though changes to regulatory procedures must be passed by vote.

"We take the vote as a call to stop political fighting and get on with the work on reviving the economy and see to it that the working people of this country can have better lives," Saenuri Party leader Kim Moo-sung said.

Ruling party candidates won in key battleground districts in the capital and central regions, and a prominent political confidant of Park scored a decisive victory in a liberal stronghold district in the south.

Most of the 15 seats were vacated when lawmakers quit to run for mayoral and gubernatorial elections in June or were stripped of their seats due to convictions for electoral irregularities stemming from a parliamentary vote in 2012.

Park, who is limited by South Korea's constitution to a single term, has called for all-out efforts to boost the economy, and Finance Minister Choi Kyung-hwan has promised billions of dollars in stimulus spending and steps to shore up demand in the property market.

Private consumption generates about half of gross domestic product, but the economy still relies heavily on exporters.

The Sewol ferry disaster dampened economic growth as well as Park's popularity.

The ferry sank on a trip from the port of Incheon to the holiday island of Jeju on April 16. Many crew members abandoned ship as the children waited in their cabins as instructed and the coast guard was slow to respond as the vessel sank.

The disaster prompted mass cancellations of tour contracts, hurt tourism-focused businesses and crimped consumer sentiment.

Park's popularity rating plunged from 63 percent to 45 percent in a poll conducted last week. Saenuri also suffered, but it still has higher ratings than the main opposition New Political Alliance for Democracy.

(Editing by Ron Popeski and John Stonestreet)

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