The Aftermath of the Asian Financial Crisis in Korea

If you go to Korea and say that you work for the World Bank, many people will not know what it is. But, if you say that you work at the International Monetary Fund (IMF), everybody will know where you work. This is exactly what I experienced in my recent visit to Seoul, my home city. The reactions underscore some of the changes Korea is undergoing since its financial crisis last November.

The crisis described by some local newspapers as "the most critical since the Korean war" has made "IMF" a commonplace word among Koreans: Talk shows and TV forums as well as news reports flood listeners with "IMF." Slogans on street banners, stickers on taxis and buses, and even promotional ads of department stores often use "IMF" to forcefully deliver their messages. Shopkeepers, for instance, put up signs saying "IMF sale," which means a sale so cheap as to survive economic hard times in the era under IMF programs. Even kids know "IMF." My second-grade nephew, excited by his aunt�s visit from America, boasted his knowledge: "IMF is borrowing money from other countries because our economy is in difficulty."

The prevalence of the word "IMF" reflects the sentiment of crisis which permeates Korean society. For Koreans, it seems that "IMF" is not just the name of an international institution that lent them rescue loans, but "IMF" describes all economic difficulties that they are undergoing�layoffs, early retirement, and rising prices. The newspaper where I had worked, with a circulation of 2.5 million, laid off more than a quarter of its employees�about 300 staff including 40 journalists. Layoffs were unprecedented at the newspaper which had experienced decades of expansion. In addition, the paper initiated 20 percent salary cuts for remaining employees. Journalists have for months been reporting "IMF" layoffs in Korea. One of my former colleagues at the newspaper stated, "These days we are writing our story, not their story."

Koreans are embarrassed about the current situation. Self-criticism is widespread among Koreans. People joke that IMF means "I am F" in the sense that the country is getting a grade of "F" in its finance course. As far as their economic achievement was concerned, Koreans were proud of their "A" performance during the last three decades. But maybe not any more. They have just found themselves at the other extreme.

Koreans are not yet sure what caused the crisis but they think that they know whom to blame. On the very first day of my arrival, the cab-driver poured criticism on the previous President saying that he was inept in economics. He also blamed corrupt business practices between conglomerates and the government. According to him, "they collapsed the economy." More surprising to me was the "conversion" of my old father, who used to support the government and who objected to his daughter�s political outspokenness. Now, he has become a critic of the government.

Despite growing uneasiness and blame in Seoul, I could feel a strong consensus among Koreans to regain economic vitality and fix the country�s problems. Reform is the burning issue under discussion. "Let�s overcome the crisis by tightening the belt": this slogan is everywhere from street signs and to TV. It doesn�t seem to be just lip service or "top-down" brainwashing as sometimes it used to be under authoritarian governments. People, many of whom are still surprised by what has happened to them during the last few months, appear to be desperate to improve their situation. This societal mindset pressured a confederation of trade unions to cancel its ultimatum for nation-wide strikes this year. At the height of tension between labor unions, businesses, and the government, the headline of a leading newspaper wrote: "Another strike will bring complete collapse of the country."

Nevertheless, despite the appearance of resolve to fix the problems, people fear that the crisis may yet deepen. People who still have their jobs worry, "Will I be laid off next?"

The spreading pain of the crisis has already changed the atmosphere in Seoul, the heart of the country. What I saw during a week in Seoul in March tells me that Seoul is not what I once knew. In my memory, Seoul had been always in a bustle: scurrying people, bumping shoulders, traffic jams and noise. Today, taxis are empty. Streets are uncrowded. Traffic is no longer jammed.

Ms. Park is a former journalist from Seoul, Korea.

EDI Forum, Summer 1998.