In December 1997 the International Monetary Fund (IMF) offered Korea loans to help alleviate its financial crisis. These loans were accompanied by what the IMF called "extreme structural conditionality.” Korea was required to replace its traditional East Asian economic system with a neo-liberal model. We review economic performance in the neo-liberal era. Growth has slowed, poverty and inequality have risen, and investment spending has stagnated, while foreign ownership of Korean firms and banks has skyrocketed. We argue that foreign investment has not helped Korea. For example, by leading a shift from corporate to consumer lending, foreign control of Korea's financial markets has constrained capital accumulation and helped create an excessively indebted household sector, while making it harder for the government to adopt progressive economic policies. We conclude that the 8 year experiment with radical neo-liberal restructuring has turned out well for foreign capital and wealthy Koreans, but has been a failure for the majority of Korea's people.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 34 (2005) Issue (Month): 4 (December) Pages: 415-434 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF