Restructuring Korea Inc.: the 1997 financial crisis and structural reform

In the winter of 1997, Korea was plunged into the biggest financial crisis in its modern history. Unbeknownst to most outsiders, Korea had actually experienced three major financial crises since the beginning of its economic ‘miracle’ in the 1960s.1 The first was a relatively mild and protracted affair happening over 1969-72 – during this period, the economy was still growing, although not as fast as it had been. There was another rather more severe crisis in 1980, when the economy contracted for the first time since the 1960s. However, even the 1980 crisis pales when compared to the 1997 one.