Economic Restructuring and Social Reformulating : The 1997 Financial Crisis and Its Impact on South Korea

Abstract

The 1997 financial crisis created major ripples all across Korean society. The crisis has meant not only a halt to Korea's decades-long phenomenal economic growth, but also its subjection to comprehensive restructuring processes. Controversies and debates over the cause of the crisis notwithstanding, Korea has undergone profound transformations, swallowing a bitter pill prescribed by global capitalism in general, and the IMF in particular. This paper examines the nature of prescription by the IMF and the characteristics of Korean governments in conjunction with the financial crisis. The paper criticizes the IMF's imposition of the same ready-made policies to Korea, and characterizes the Korean governments as 'a reckless knight to the world' and 'a docile student of the IMF school'. Although much has been written about the financial crisis, especially on the causes of the crisis and preventive measures, little attention has been paid to its social and cultural impact. In view of this, this paper discusses how the financial crisis, ill-suited IMF measures and misguided economic policies of the Korean government have had far-reaching consequences on Koreans' worldview and identity, as well as on social problems, such as the weakening of the weak and destabilizing middle class.