Asia Times: The crisis has two faces for South Koreans



	March 27, 1999	atimes.com

The Koreas

The crisis has two faces for South Koreans
By Ahn Mi-young

SEOUL - For Kim Jong-guk, 31, a corporate salesmanat Daewoo Securities here, this is too good a new world to betrue. As the Asian economic crisis continues to batter SouthKorea, Kim has suddenly become one of the wealthy.

This year, he expects to receive 200 million won ($160,385) as allowances on top of his annual salary of 30 millionwon ($24,000). Just a year ago, before his companyintroduced the merit-based allowance system, this would have beenunthinkable.

But these are strange times. Just ask Chung Yang-hoe, 36. When hegraduated from college more than a decade ago, he was lookingforward to lifelong employment in one of South Korea's giantcompanies. He did live that life - until last year, when he losthis job as a manager in a top conglomerate that was downsizing.

Chung then poured every last won that the company gave him asseparation pay into a food store. Today, he is struggling to payback 700,000 won ($560) as monthly interest paymentfor a 50 million won ($40,000) bank loan that he hadborrowed to buy his flat - whose price has been in a deep divesince last year.

Says Chung: ''I feel helpless, and I do not know how much longerI can hold on."

Such tales of extremes are getting to be common in recession-hitSouth Korea, which economists are predicting will be among the firstof the Asian countries to pull themselves out of the crisis.

Even as the government predicts that the economy will post a two-percent growth figure by the second half of this year, SouthKorean society is seeing itself being pulled into two oppositedirections.

This polarization has become evident particularly among themiddle class, where there are the few success stories of new highflyers like Kim along with an abundance of gloomy tales such as that ofChung.

Since December 1997, 64 percent of the nation's six million-strong middle class have slid down to the low-income bracket, saysHan Sang-choon of the Daewoo Economic Research Institute, whilesix percent have moved up to the high-income bracket. The remaining30 percent make up the fragile middle class, whose members might be pusheddown or up at any moment.

The concept of the ''two nations,'' first coined by the Britishin the 1980s ''may become a reality in our nation soon,'' sayssociology professor Kim Ho-gi of Yonsei University.

But the crisis has produced many more ''absolute poor people''than new members of the rich.

The ''absolute poor'' are defined, in the case of four-member families, as having monthly incomes of 803,000 won ($644) or less.

Before South Korea succumbed to the ''Asian virus'' in late 1997,only 4.1 percent of the population, or 1.64 million people, were consideredto be among the absolute poor. By the end of last year, that figure hadincreased to 11.6 percent, according to KoreaDevelopment Institute, a government think tank.

One resulting trend is that goods have to be either veryexpensive or very cheap in order to attract buyers. Since lastyear, South Korea's top three electronics companies - Samsung,Hyundai and Daewoo - have scaled back their middle-priced rangesof rice cookers, washing machines and refrigerators, which wereselling slowly after the crisis.

Fashion garments have also been selling best at the high and low ends, while about 40 percent of the middle-priced brands werepulled out of the market in the past year.

At the Hyundai Motor factory, the production lines for the high-end Sonata and Grandeur are always busy, as are the workerschurning out the low-end Atoz model. Left idling is the middle-priced Avante line.

Meanwhile, at the super-deluxe Hilton Hotel in the capital, aFrench restaurant has no problem filling its tables even though the tabaverages a hefty 150,000 won ($120) per person.In contrast, other restaurants around town would be unable to lureoffice workers at lunchtime unless they slashed prices to 3,000 won (alittle more than $2).

Says businessman Ha Seung-ho, who is targeting those who havesuddenly found themselves with more than enough money: ''The newrich people really care about doing things differently from everyone else."

Ha runs a sort of exclusive club that limits its membership tocertain professionals and managers at foreign companies. Themembers usually meet at weekend parties. Last summer, the club hadsome 100 members. Today, reports Ha gleefully, it has 2,000members.

The labor market is also being segregated into the winnersand the losers. Middle management positions used to be amongthe most coveted job posts. In the crisis, however, these have becomethe first to disappear. Sales jobs that were snubbed beforethe recession became popular among young workers aftercompanies adopted performance-based allowances.

Other ''winner'' posts are those of fund managers, financespecialists, consultants and information technology personnel.

(Inter Press Service)

Korea Asian Sex News | Asian Sex Gazette