58 Anniversary A Familiar Story
For the 30-Somethings ‘IMF Generation,’ Financial Crisis Is Nothing New
By Jane Han
Staff Reporter
Meet Dong-hoon. The 37-year-old these days dreads the end of the month because that's when all his bills are due. Rents for his three-bedroom apartment and small business in northern Seoul, plus kindergarten tuition for his twins, add up to almost 5 million won every month. Add other living expenses, and Dong-hoon needs at least 6 million won to make ends meet. With his interior business slowing down, he's been in the red for the past two months.
Next, there's Eun-hee, a homemaker who's been married for almost 10 years. After raising her son for a little over five years now, the 36-year-old had been planning to belatedly join the workforce. But the credit crisis hit and even the modest sales jobs she was eyeing are no longer open.
Then, we have Young-suk, who's in the same age range, but lived a slightly different life than the other two. The 37-year-old junior manager at a major conglomerate just got married last year. He stayed single for long because he wanted to save money and settle down before tying the knot. Maybe it was a good plan, but Yong-suk and his wife are still far from paying off their house with interest rates soaring sky-high now.
The three have walked different paths in life, but hold one thing in common: they're part of the so-called IMF Generation, a cursed group of people who faced the 1997-98 Asian Financial Crisis upon graduating from colleges and universities.
They were pushed into the ``real world,'' when the nation's economy fell into a severe liquidity crisis, the Korean won dramatically depreciated and top corporations were buried under snowballing debt.
The International Monetary Fund bailed out the country with a $58 billion financial package, but still, thousands of cash-crunched companies collapsed and unemployment surged in a nation where workers are traditionally accustomed to lifetime jobs.
Even amid the economic chaos, life somehow went on for the IMF Generation that claims that they were the biggest victims of the crisis. But bad news for these late 30-somethings is that just 10 years after the blow, just when they're about to find stability, another sandstorm erupts.
They often say other generations don't understand what it's like to get stricken by the same thing twice, but Dong-hoon, Eun-hee and Yong-suk provide a glimpse by sharing their journey with The Korea Times.
Familiar Situation
Dong-hoon, the interior shop owner, says he never really wanted to run a business.
``I turned to self-employment because the job offers I got at the time kept getting cancelled, as companies were either shutting down or downsizing,'' he said, recalling that he actively sought for a corporate job for about a year after college graduation.
Being self-employed wasn't always bad, but the latest financial turmoil led to the biggest crisis for his business, says Dong-hoon, explaining that the construction industry's slowdown and people's money squeeze directly impact his home improvement shop.
``The 97-98 crisis took away my job opportunity once already, but I'm having to face another risk yet again,'' he said with resentment.
The same goes for Eun-hee, who married upon graduation because the job market looked bleak. She wanted to try to land a job, but says her parents insisted she marry instead.
``Very old-fashioned,'' says the housewife, ``but many of my friends also opted to be a full-time homemaker early too.''
For Yong-suk, however, marriage was a luxury. He was one of the many men at the time that thought having a family would add to their financial burden.
According to the National Statistical Office (NSO), first-time marriages of men and women from ages 37-38 climbed an average of 25 percent in 2007 compared to the previous year.
Population experts say that the Asian Financial Crisis left a gap in matrimonies and childbirth, so there was a rush of late bloomers tying the knot last year.
Having settled late, Yong-suk says, ``I bought a house early this year, but economic circumstances aren't on my side again.''
He says the monthly interest rate for his two-bedroom apartment in eastern Seoul went up from 1 million won to 1.5 million won over the past two months. Meanwhile, the value of his property dropped about 20 percent.
Brief Joy
Life wasn't only misery for the IMF Generation, however. There was a time when the capital markets did work for them during the so-called fund boom period in the mid-2000s.
Popular products like Mirae Asset's Insight Fund and well-performing emerging market funds drew a massive throng of investors in their 30s to put in their hard-earned savings for a lottery return.
Many of them weren't disappointed with the initial few years of strong figures. In 2005, South Korea's equity funds were even highlighted as bringing the best returns in Asia. However, the situation quickly changed over the past six months.
``Things happened fast and I missed my timing to withdraw,'' said Dong-hoon, who claims he lost about 25 million won so far from funds and stocks gone bad. Eun-hee and Yong-suk are in the same boat as well.
According to a recent survey done by Korea Exchange, the local bourse operator, 85 percent of the 500 professionals polled had money in funds. Among them, 30-somethings were the age group that chose this investment solution most.
For homeowners, who squeezed out their last dime to buy a house, the panic is double due to suffocating interest rates. Domestic banks are collectively hiking interest on their home equity loans to the 8- to 10-percent range.
``I was so happy when my husband and I bought our apartment two years ago,'' recalls Eun-hee, ``but now, we really have to be on top of our finances, or else, we'll get it taken away.''
Speaking for the generation as a whole, Eun-hee says shaky household economics, and rising costs of living and payments press them more than others because they have young children that are now starting to require more money for education.
No Sympathy
Although the IMF Generation self-sympathize, critics say that they were still some of the most blessed compared to other generations.
According to the NSO, men and women born in 1970 and 1971 ― who mainly represent this group ― total just over 2.3 million people.
``They're the `Seo Tae-ji generation' who enjoyed cultural richness like people of no other period in time,'' says Kim Bo-kyung, the chairman of the Samsung Economic Research Institute's Trend Institute. Seo Tae-ji is legendary singer and cultural icon who melded contemporary dance with urban-influenced rap lyrics.
Kim says the 30-somethings were also the first crowd to reap the benefits of globalization and overseas education opportunities with ease.
``It's true they had their share of turbulence, but what generation doesn't?'' he said, stressing that part of the reason for these young people's fall was their obsession with making quick money.
The Asian Financial Crisis planted a strong mind set in them that money is power, said Kim, exemplifying best-sellers like ``Making 1 Billion Won'' demonstrate their desperation to earn fast money.
Cultural critic Ha Jae-keun agrees, saying that the IMF Generation neglected to pay attention to the overall development of society because they were too focused on their personal wealth and well-being.
``Calling for quality public education, job security and welfare are all responsibilities of the people that should be done before things turns sour,'' said Ha, ``but the 30-somethings failed to give it their attention.''
Kim added that although the IMF Generation is, in fact, dealt with a similar fiscal crisis twice in crucial times of their lifetime, they should try to look at the exclusive benefits they had instead of dwelling over the negatives.