ABSTRACT
In 1960 South Korea was one of the poorest 25 countries in the world.1 Its Gross Domestic Product (GDP) per capita was just $82 (in 1960 prices). United States (US) policymakers’ assessment of the country as a ‘hopeless case’ appeared apposite at the time (Hart-Landsberg, 1993). However, the performance of the Korean economy over the next four decades or so could not have been more different from that predicted by such policymakers in 1960. After almost four decades of rapid growth, in 1997 Korean GDP per capita was approximately $11,000 (in 1997 prices). Korea was now a member of the Organisation for Economic Co-operation and Development (OECD) and one of the few countries that appeared to have successfully graduated from the Third World. As a result of this remarkable performance a vast volume of literature has been generated on the development of the South Korean political economy over this period. However, in December 1997 the Korean economic ‘miracle’ came to an abrupt end. Facing massive capital haemorrhaging and with its own reserves rapidly running out, the Korean government was forced to go cap in hand to the International Monetary Fund (IMF) for emergency liquidity support. By January 1998, per capita GDP had fallen to $6,600 and was set to fall a further 6 per cent by the end of the year (Cumings, 1999a). While the severe recession of 1998 was short-lived, with GDP growth exceeding 9 per cent in both 1999 and 2000, there is near consensus that the crisis has left a deep impression on the Korean political economy (International Herald Tribune, 2001). The crisis did not mark the demise of Korea as a centre of capitalist accumulation; it did, however, mark the end of the era of state-led capitalist development. Unsurprisingly, given the epoch-making nature of the crisis and Korea’s previous economic performance, the crisis attracted the attention of the global academic, policymaking and journalistic communities. Since 1997, countless journal articles, books and official reports have attempted to explain the origins of the crisis, analyse the changes that have taken place since the crisis, and offer conjecture as to where the Korean political economy is headed and policy advice to the Korean government.
