brought before the courts. General Chun Doo
Hwan was accused of instigating the 1979 mili-
tary coup and the 1980 massacre in the city of
Kwangju and ex-president Roh Tae-Woo of
taking $361 million in bribes from business
leaders while in office. Kim Dae-Jung, former dis-
sident, was elected president as the decade drew
to a close in December 1997.
South Korea was one of the most successful of
the ‘Asian Tigers’, its economy boosted by global
exports. In this South Korea was following the
first of the ‘Tigers’, Japan. But lax government
management, foreign debts, as well as competi-
tion from Asian countries with lower labour costs
have created problems. Corruption in business
and politics has been endemic. Twenty-three
bosses of the big industrial conglomerates, the
chaebols, were convicted of bribing the two dis-
graced ex-presidents General Chun and Roh Tae-
Woo, but escaped prison terms. A country can
manage without ex-presidents but not without its
business leaders.
By the autumn of 1997 the ‘Asian Tigers’ had
lost their bounce – not only Japan and South
Korea but also the younger more virile Tigers.
Stability and investor confidence, with money
from abroad readily available, had brought rapid,
seemingly unstoppable, growth. The abundance
of cheap credit led to mismanagement and excess:
building – especially of office block skyscrapers –
boomed. And then the giddy ride shuddered to
a halt and investor panic even engulfed the
sounder economies of Hong Kong and Singapore.
North Korea’s military threat hangs as a shadow
over South Korea. Kim Dae-Jung adopted a policy
of reconciliation with the North. Kim and his
regime, he believed, should be engaged not con-
demned to containment and isolation which
would, he believed, only increase the paranoia of
the leadership. His ‘sunshine policy’ reached its
climax when he met with Kim Jong Il in 2000,
both exuding smiles and friendship. The South
Korean president promised financial assistance and
development help in return for closer links
between the two countries, open road and rail
links and for families torn apart by the Korean
war to be able to visit. Rather prematurely Kim
Dae-Jung was rewarded for his efforts with the
Nobel Peace Prize. In 2003 it emerged that the
wheels had been oiled by a bribe of a large sum
paid by a company in the Hyundai chaebolto the
‘Dear Leader’, it is alleged with Kim Dae-Jung’s
knowledge. In South Korea politics were
enlivened by the corruption scandal investigation.
Kim Jong Il was able to play on the resentment
of a new generation of South Korean anti-
Americanism which had its roots in ethnic resent-
ment and, justifiably, in protest at the American
support for past corrupt military regimes. Kim
Dae-Jung’s dissident politics in Korea remained
far from clean. Corporate ‘donations’ and vote
buying distorted the democratic process. In rela-
tions with the North, Kim saw no alternative to
the policy of engagement he was following
though it has yielded little positive results after
the first media-hyped family reunions.
While Kim Dae-Jung’s five-year record as a
political reformer does not shine, his govern-
ment engineered a spectacular turn around of the
economy from its depths in 1997. Once Japan
was the model, now Korea can serve Japan as an
example. The medicine was drastic. The IMF pro-
vided a loan to save the country from bankruptcy.
The chaebols, Korea’s largest conglomerates, over-
laden with debt, were forced to restructure, those
that were unable to survive financially were not
bailed out but went to the wall or were taken over
by foreign companies such as Daewoo managed
by US General Motors. The culture of business
secrecy and corruption was tackled. The banking
system was overloaded with bad debts. Banks
unable to deal with them were taken over by the
state. Western management skills were intro-
duced, the country opened to competition and
deregulation. The pain was great, unemployment
soared. The people, however, responded to the
crisis with dogged determination to build their
industries anew on a sounder basis. Inefficient
businesses were forced into bankruptcy. Within
two years, South Korea was back on a healthy
growth rate, once more attracting foreign invest-
ment but this time into a sound economy.
Employment is back to pre-crisis levels. Yet the
one thing the people wished for remained unful-
filled, the lifting of the threat of the armistice
frontier and the unification of the country.