The Korean Economy Beyond the Crisis

The Korean Economy Beyond the Crisis

Edited by Duck-Koo Chung and Barry Eichengreen

Providing an integrated analysis of the event and its consequences, the chapters in the book consider the causes of the crisis, the response of the US government and International Monetary Fund, adjustments in the Korean monetary and fiscal policies, and the success of financial and corporate restructuring. The concluding chapters bring the story up-to-date, describing the aftermath of the crisis and assessing whether there has been sufficient reform to facilitate the country’s recovery and growth.

Chapter 12: Social realignment, coalition change and political transformation

Hyun-Chin Lim and Joon Han

Subjects: asian studies, asian economics, economics and finance, asian economics, financial economics and regulation


Hyun-Chin Lim and Joon Han INTRODUCTION ‘History repeats itself.’ When it comes to Korea, this Western proverb is telling. As past politics become history, history presents past politics. As the five-year term of President Kim Dae Jung draws to a close, political cleavages are deepening. Conservatives discontented at the lopsided North–South dialogue label President Kim a ‘Communist’, while radicals frustrated by the slow pace of restructuring call him a ‘reformist in disguise.’ Some would say that the conservative–progressive conflict now visible in Korea is almost as heated as the one that led to the Korean War more than half a century ago. Added to regional antagonism and class division, the result is a divisive social and ideological rift. It is ironic that the Kim Dae Jung regime, the beneficiary of the first instance of horizontal power transfer through election in Korea, has seen social conflicts worsening instead of improving. Why is social conflict so prevalent? How are the reform measures aimed at by the Kim Dae Jung regime related to and affected by the growth of this phenomenon? What changes have occurred in the ruling coalition among key social and political players since the crisis of 1997–98? This chapter attempts to answer these questions. The literature on structural adjustment tells us that economic restructuring brings with it social realignment and political change (see Coak et al., 1994; Veltmeyer et al., 1997; Smith and Korzeniewicz, 1997; Smith et al., 1994a, 1994b).1 Korea is...

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