Koreans Forgo Pop Tarts to Eat Into Public Debt
SEOUL, SOUTH KOREA
Late January is usually a happy time in South Korea. The Lunar New Year means families return to hometowns, catch up, eat, and play traditional games. But this winter, mired in economic crisis, Koreans are grateful there's any holiday at all. The government almost canceled it.
The three-day break cost South Korea $1 billion in lost exports, according to reports. With the nation struggling under $153 billion in foreign debt, foreign-exchange earnings are precious. But a little relaxation was deemed better by officials than more sacrifices - there being enough of those already.
Just ask some laid-off workers, or students who can't afford to study abroad. Words like "national unity" pepper speeches and editorials as everyone is asked to chip in for national recovery. Tenacious Koreans, who have survived civil war and colonization this century, are responding to the call.
Outside Seoul, the capital, a storekeeper hunches over her kerosene heater. But it's turned off. Tapping it she says, "It's cold, huh? Because of the IMF," the International Monetary Fund, which is helping Korea.
Nearly all of Korea's energy is imported, and fuel prices rose as the value of the currency, the won, dropped. "Not a drop of oil comes out of our land," the storekeeper says. "We got soft and sat around in our T-shirts in the winter. The people in their 20s and 30s don't know scarcity.... We the older generation have to carry the country again. It's patriotic."
The woman points to her empty ring finger - she has donated her gold wedding ring to the nation.
Since a collection drive began early this month, South Koreans have contributed at least 100 tons of gold - $1 billion worth. Citizens sell jewelry and trinkets in exchange for won or donate them outright to the government, which in turn sells the gold overseas to earn foreign exchange.
Meanwhile, stores are slashing prices on imports just to get rid of them. It's now taboo to squander foreign exchange on Pringles potato chips and Pop Tarts.
Lee Sang Bum's leather-goods store is having an "IMF-era import liquidation bargain sale" with Italian leather bags 50 percent off. "It's too expensive to import this stuff," he says.
Some vendors here hope to capitalize on antiforeign sentiment. One shoe advertisement by a Korean shoemaker features sneakers wrapped in US currency. The ad asks, "Do you wear dollars?"
Meanwhile, TV stations cut broadcasting time and show more serious programs while production companies cancel movie shoots and concerts.
Cutting heat and entertainment might contribute to the already grim atmosphere in Seoul. But while people aren't exactly enjoying themselves, the "society feels a bit warmer" as everyone rallies together, notes one longtime foreign resident.
Lee Ji Young planned to study in the US, but is now marooned at home. Although she's a little bored, the family spends more time together, which she admits "is kind of a blessing."
Impressions of sacrifice
The efforts of Koreans impressed visiting US congressmen last week. "I was moved almost to tears" seeing Koreans giving up their gold jewelry," says Rep. Jesse Jackson Jr. (D) of Illinois. "It's a testimony of their true strength." Mr. Jackson and other members of the House Banking and Financial Services Committee were touring Asia prior to a congressional review of whether to bolster the IMF's reserves.
Rep. Jim Leach (R) of Iowa was "extraordinarily impressed with the process of Korean democracy.... I know of no comparable [multiparty] cooperation in any Western democracy that is happening in Korea today."
Korea's crisis comes during its first peaceful democratic transfer of power after presidential elections last month.
But for all their patriotism and willingness to pitch in, the public refuses to suffer alone.
Next month the Board of Audit and Inspection will begin questioning outgoing President Kim Young Sam, the Ministry of Finance and Economy, and the Bank of Korea. Some Koreans allege that the government was warned repeatedly that a foreign-exchange crisis could occur, but did nothing.
"If [Mr. Kim] is president, he should know the facts. He's responsible for the crisis. He should be punished," says Lee Ju Seop, a graduate student.
President-elect Kim Dae Jung says that so far, the point is only to uncover facts, not punish people. Reformers hope it will at least send the signal that mismanagement won't be forgiven.
Chung Tae Soo, owner of Hanbo, the first conglomerate to fail in a series of corporate failures last year, is being sued for damages due to mismanagement by Sohn Kun-seok, the court-appointed receiver for Hanbo. Koreans seem tired of top executives living good lives after bankrupting a company through corrupt practices.
But similar justice-seeking in the past has been mostly for show. Several key figures jailed last year in the Hanbo scandal are already free.
"The authorities released the son of the president first, the aides to the president next, just leaving those who carried out the former's orders in jail. It is no wonder that the terms 'the spirit of the law' and 'social justice' carry no meaning these days," writes the Chosun Ilbo, a Seoul daily, in an editorial.
Former Presidents Chun Doo Hwan and Roh Tae Woo, jailed in 1996 for massive political corruption and their role in a 1980 massacre, were released from jail last month after serving little over a year of their long sentences.
Meanwhile, South Korea's huge conglomerates are under pressure to reform. Some have begun restructuring plans, but those plans are criticized as soon as they emerge.
Government cuts ahead?
The government may trim down too. Plans are being floated to cut the number of lawmakers by as much as 30 percent.
Not just Korean citizens are dealing with tough times. Foreign workers like English teachers are leaving in droves after seeing their paychecks effectively halved by the plummeting exchange rate. Workers from Southeast Asia - more than 140,000 are here illegally - may be quitting their dirty, dangerous, and difficult jobs to make room for newly unemployed Koreans. One travel agency ad offers the "best price for foreign workers" - a $100 one-way trip to Manila.