As the plane taxied to the runway in Busan, South Korea the other day, flight attendants were agitated over smartphones. Not exploding Samsungs, but my fellow passengers refusing to turn off their devices. The cause of the collective roguery: Park Geun-hye addressing a scandal that could end her presidency.

Park’s apology came as tens of thousands of protesters demanded she resign over bizarre revelations about Rasputin-like friend, Choi Soon-sil. Allegations include Choi shaking down corporate giants for tens of millions of dollars, running a slush fund, having access to confidential (and perhaps classified) information, meddling in state affairs and using her Park connections to cajole Ewha Womans University to admit her daughter.

A dustup that dwarfs Hillary Clinton’s email mess has Park’s approval numbers at all-time lows. Calls for her resignation or impeachment are already at a fever pitch amid a controversy that may cost Koreans their first female president. The real cost, though, will be to the nation’s flagging economy and the Kospi stock index.

Even if Park survives, the last 15 months of her term would be a reform dead zone. Her first 1,345 days were underwhelming enough. Plans to curb excesses of family-run conglomerates, cultivate a startup boom and design a more innovative workforce fell by the wayside. If Park achieved so little before “Choi-gate,” expect her administration to accomplish even less now. Trouble is, Park’s time in office is a critical — and now squandered — window of opportunity to raise South Korea’s game in Asia.

In essence, voters turned to Park to avert a Japan-like lost decade. Her father, strongman Park Chung-hee who led Korea from 1961 until his assassination in 1979, is revered by many for transforming Korea into a trading powerhouse. Yet the corporate champions he cultivated, the chaebol, monopolized virtually every corner of Korea Inc. and ran amok. Their excesses culminated in South Korea’s 1997 crash and hobbled the development of a vibrant small-enterprise sector. Voters thought his daughter would build a more “creative economy.” Little did they know Park Geun-hye’s tenure would increase the odds of emulating Japan’s.

Just like Japan, South Korea is an expensive property in a cheap neighborhood as China, India and Indonesia compete for manufacturing jobs. Park was right to argue that the answer is moving up the innovation ladder. That means wrestling power away from the chaebol in favor of a new generation startups and industry disrupters. Park’s tenure demonstrates how old Korea is impeding the development of a new one.

The thing that bothers South Koreans about this scandal isn’t the alleged corruption. Voters have seen plenty of breathtaking graft cases before. Predecessor President Lee Myung-bak faced impropriety charges over his retirement home and assorted allegations aimed at relatives and allies. Lee’s predecessor, Roh Moo-hyun, committed suicide amid bribery allegations. And so on, and so on.

What makes Choi-gate different — driving my plane mates to flout safety announcements — is how recklessly and bizarrely Park acted. In a sense, it’s more about what Park’s lapses signify.

Choi, Park’s behind-the-scenes Sherpa, is the daughter of religious leader Choi Tae-min, himself a Rasputinesque character.

Like the Russian mystic who infiltrated the tsar’s inner circle, Choi Tae-min held sway over Park Chung-hee in the 1970s. Here, family history is repeating itself. Local media are buzzing with theories that Park Geun-hye is Choi Soon-sil’s puppet. One paper called Park’s aides “just mice to Choi’s cat.”

Rumors have swirled for years about an improper relationship between Choi’s late father and her friend, the president. A 2007 U.S. cable unearthed by WikiLeaks reported talk that the “late pastor had complete control over Park’s body and soul during her formative years and that his children accumulated enormous wealth as a result.”

Park denies it. To make matters weirder, Park reportedly gets advice from an unofficial cabal of advisers called “the eight fairies.”

No, you couldn’t make this stuff up if you wanted to. Park could have used the first 44 months of her five-year term cultivating a new wave of entrepreneurs, using tax incentives to create jobs from the ground up, revolutionizing an education system favoring rote learning over risk taking, empowering women, deregulating industry, prodding companies to share profits with workers and reducing the dominance of the chaebol. Instead, Park’s shadowy ally allegedly shook down the very giants she promised to curtail.

Time isn’t on South Korea’s side as China rises, Japan exports deflation and U.S. growth underwhelms. Political chaos in Seoul greatly reduces the odds South Korea will meet the challenge. Every year that goes by without bold and creative restructuring makes it more likely South Korea will slide into a multi-year funk.

Whether or not Park keeps her job, her presidency will be remembered more for freakish scandals than putting the country on course for a brighter future. That augers poorly for its 50 million people and investors alike.

William Pesek, executive editor of Barron’s Asia, is based in Tokyo and writes on Asian economics, markets and politics. www.barronsasia.com

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