'1997 Asian crisis worst event in Korean economy'
By Yoon Ja-young
A college professor, surnamed Park, in Seoul, remembers how the 1997-98 Asian financial crisis affected his family.
“I was a college student back then. When I got home, red tags were attached all over, on furniture, TV, etc. They were seized by my father’s creditors,” said Park who had to stand on his own as the family business went bankrupt.
Twenty years have passed since the unprecedented turmoil hit the country. It is better known as the “IMF crisis” here as Korea went through a painful bailout program of the International Monetary Fund (IMF) in return for the rescue fund.
Many people had to bite the bullet and tighten their belts as the strict program dealt a huge blow to their lives.
According to a survey of 1,000 adults conducted by the Korea Development Institute (KDI), 57.4 percent of Koreans cited the IMF crisis as the hardest moment in the past 50 years of the Korean economy.
Six out of 10 Koreans think the crisis negatively affected their lives. Four out of 10 said they themselves or their families experienced unemployment or bankruptcy during that time. They also suffered mental distress, with 64.4 percent citing psychological damage.
When asked what they think caused the crisis, 36.6 percent cited failures in policies such as management of the foreign exchange reserves or supervision of banks.
Systematic failure such as the corrupt ties between politics and business followed with 32.8 percent. Those who pointed to excessive investment and expansion by conglomerates took 15.3 percent.
And 54.4 percent of the respondents think cooperation and unity among people helped the country overcome the turbulence quickly, while 15.2 percent cited restructuring and innovation efforts.
Citizens participated in a nationwide campaign to collect gold to help save the faltering economy. The campaign contributed to securing the U.S. currency the country urgently needed by selling the gold to foreign countries.
“It is notable that unity among people such as the gold collection campaign is evaluated higher than restructuring and innovation efforts,” said Lim Won-hyuk, director of the KDI global economy research division.
When asked what comes to their mind first when they think about the Asian financial crisis, 42.4 percent cited the gold collection campaign while 25.4 percent picked massive unemployment and 17.6 percent bankruptcy of conglomerates and banks.
“It is important to secure social cohesion through inclusive growth,” Lim said.
Koreans think the crisis 20 years ago aggravated the country’s current economic and social problems.
When asked which of the problems the crisis worsened most, 88.8 percent pointed to the problem of irregular workers.
Eighty-six percent said they prefer stable jobs such as civil servants or a teacher, while 85.6 percent said the crisis has widened the income gap.
The crisis gave birth to irregular workers, ending the life-time employment system. Currently one-third of Koreans are irregular workers; often earning less than regular workers and suffering low job security. Stable government jobs thus have gained popularity.
According to a survey by Statistics Korea, 45 percent of Korean youngsters said they want jobs with the government or state-run enterprises.
When asked what the most crucial task lying ahead for the country is, 31.1 percent chose job creation and strengthening job security, while 32.7 percent cited building up trust through eradication of corruption. Those who call for measures against the low birthrate and aging society took 32.5 percent.