• South Korea's President Yoon Suk Yeol declared martial law, sparking a political crisis, but reversed the decision hours later.
• The declaration led to a standoff with parliament, resulting in armed troops entering the National Assembly building.
• The crisis prompted Yoon's staff to offer their resignations and lawmakers to propose a bill to impeach Yoon.
• The political turmoil affected financial markets and caused international concern, highlighting the fragility of democracy.

South Korea's President Yoon Suk Yeol declared martial law, only to reverse the decision hours later, sparking the biggest political crisis in decades in Asia's fourth-largest economy. The unexpected declaration late on Tuesday led to a standoff with parliament, which rejected his attempt to ban political activity and censor the media. This resulted in armed troops forcing their way into the National Assembly building in Seoul.

The president's sudden move was met with strong opposition from lawmakers who called for his impeachment. A coalition of lawmakers from opposition parties planned to propose a bill to impeach Yoon, which should be voted on within 72 hours. Hwang Un-ha, one of the MPs in the coalition, emphasized the urgency of the situation, stating, "The parliament should focus on immediately suspending the president's business to pass an impeachment bill soonest."

In the wake of the crisis, Yoon's chief of staff and senior secretaries offered to resign en masse. Yoon justified his declaration of martial law in a TV address, stating it was necessary to defend the country from nuclear-armed North Korea and pro-North anti-state forces, and to protect its free constitutional order. However, he did not cite any specific threats.

Impact on the Nation and the Economy

The declaration of martial law led to chaotic scenes as helmeted troops climbed into the parliament building through smashed windows and military helicopters hovered overhead. The military announced that activities by parliament and political parties would be banned, and that media and publishers would be under the control of the martial law command.

However, within hours of the declaration, South Korea's parliament, with 190 of its 300 members present, unanimously passed a motion requiring martial law be lifted. This included all 18 members present from Yoon's party. The president then rescinded the declaration. Protesters outside the National Assembly celebrated the decision, chanting "We won!" and one demonstrator banged on a drum.

The political crisis has led to more protests, with South Korea's largest union coalition, the Korean Confederation of Trade Unions, planning to hold a rally in Seoul and vowing to strike until Yoon resigns. The U.S. embassy urged U.S. citizens in South Korea to avoid areas where protests were taking place, while some major employers including Naver Corp and LG Electronics Inc advised employees to work from home.

International Reactions and Historical Context

The political turmoil has also affected financial markets. South Korean stocks fell around 2% early on Wednesday, while the won steadied to trade around 1,418 to the dollar, having plunged to a two-year low. In response, Finance Minister Choi Sang-mok and Bank of Korea Governor Rhee Chang-yong held emergency meetings overnight and the finance ministry promised to prop up markets if needed.

The government pledged to inject unlimited liquidity into stocks, bonds, short-term money market as well as forex market until they are fully normalized.

The crisis in South Korea, a country that has been a democracy since the 1980s, and is a U.S. ally and major Asian economy, caused international alarm. U.S. Secretary of State Antony Blinken welcomed Yoon's decision to rescind the martial law declaration, stating, We continue to expect political disagreements to be resolved peacefully and in accordance with the rule of law.

The political crisis in South Korea is reminiscent of the 1980 Gwangju Uprising, a pro-democracy movement in South Korea that was brutally suppressed by the military regime of Chun Doo-hwan, who had declared martial law. The event is considered a pivotal moment in South Korea's transition to democracy.