Korea marks 10th anniversary of financial crisis

This year marks the 10th anniversary of the outbreak of the Asian financial crisis which started first in Thailand and swept over South Korea. Remembered as the worst national crisis after the Korean War, during this period, small and medium enterprises went bankrupt one after another due to financial straits and the number of unemployed reached 1,780,000 in February 1999. Housewives lined up to donate their gold to help pay the national debt. Students who attended universities during the financial crisis, people who are now in their 30s, also experienced turmoil.

Ko Joung-min's (‘97, French Literature) father, who worked in construction, also faced tremendous difficulties in running his business. Since then, Ko had to earn her own spending money and tuition fees while preparing for her career. “I remember going to an English institution at 5:30 in the morning and doing private English lessons after school to make money,” says Ko.

Naturally, the number of students going abroad to study language also decreased during the period. “I had friends who postponed their plans because of the skyrocketing exchange rates,” said Nam Woong (‘96, Korean Literature). “Various student loan products were also introduced from banks to aid students financially at this time,” Nam added.

In the years 1998 and 1999, the Ministry of Education ordered Korean universities to freeze tuition fees in order to reduce the burden on household expenses. Also, installment payments of school tuition fees were introduced.

During this period of time, the number of students who withdrew from school also increased. In the year 1997, a total number of 196 students quit school, whereas in 1998 and 1999, 282 and 298 students left school respectively. 

Because many companies under went severe reconstruction, getting employed was difficult back then, much as now. “There were only a few jobs available and many students were absent from school to prepare for either employment or graduate school,” said Nam.

Many male students, on the other hand, joined the army as a means of escape. During the financial crisis, the number of people who were enlisted in the army was fives times more than the average. “Students were unsure about their future so many male students entered the army although they had not planned for it. Some of my friends had to wait for five months on the waiting list,” says Yang Seung-pil (30).

Students’ perspectives on choosing jobs also changed during the crisis. According to the National Statistical Office, people considered safety (29.6 percent) as the most crucial factor in selecting a job, followed by future prospects (29.2 percent) and income (27.1 percent) in 1995. But in 1998, a year after the financial crisis, the percentage of people who chose safety as the primary factor increased to 41.5 percent, whereas the percentage who focused on future prospects decreased to 20.7 percent. This emphasis on safety has persisted since the financial crisis, as 2006 statistics show 32.6 percent chose safety first when looking for a job. Over the same period, the competitive rate for the grade 9 civil servant examination, the route to a relatively secure government job, increased from 48:1 in 1997 to 84:1 in 2005.

Although it might seem as if the financial crisis had only negative consequences, some say that people who attended university during the time of crisis are more mature and patient, after having experienced difficult times. Professor Kim Myoung-hee (Computer Science & Engineering) said, “Students definitely learned how to cope with critical moments and became more interested in the current issues of the society.”

Ko says that what she had learned from overcoming her difficulties during the financial crisis is actually a great help in her career. “Honestly, it was pretty tough time for me, but if my four years of college taught me academic information, the two years of the financial crisis instructed me on the lessons of life,” said Ko.