S. Koreans’ Crisis Mentality: Patriotism

When it comes to self-sacrifice, no detail is too small for the earnest citizens of this newly troubled country.

Wedding halls have stopped serving the traditional wedding repast between 2 and 4 p.m. on the grounds that most guests, already full from lunch, were wasting the food. Apartment elevators are being programmed to stop only on alternate floors to save electricity. Average folks have tossed more than $135 million in gold trinkets into the national hat as a way to stoke foreign reserves.

Not that this industriousness is always carried out with good cheer. The nation is in serious trouble, and personal dreams have been shattered. Thus the hiking trails at nearby Pukhansan National Park have become a sort of hide-out for newly unemployed businessmen. Too embarrassed to tell their families the bad news, the men continue to leave their homes each morning dressed in work attire but head for the mountains instead of their offices.

The human toll can also be measured by the increase in suicide and crimes such as theft, burglary and kidnapping, according to local newspapers. By one count, business executives are killing themselves at a rate of one a day. A man is accused of kidnapping and beating a debtor who owed him nearly $28,000.

But, confronted by their worst economic crisis in modern times, South Koreans are facing their humiliation and darkened prospects with a survival instinct and patriotic fervor reminiscent of World War II America.

Exhorted by President-elect Kim Dae Jung, the longtime dissident who inherited the daunting task of resurrecting his nation’s economy and psyche, Koreans are rediscovering the intangibles that throughout history have enabled them to survive and thrive encircled by China and Japan--and, in the past three decades, to build their desperately poor country into the world’s 11th-largest economy.

“Koreans have a sense that there is no one else they can rely on but themselves,” said Eun Mee Kim, an associate professor at Ewha Women’s University in Seoul. “And whatever sense of unity they have is more evident during crisis times.”

That is why many longtime Korea observers expect the country to rebound from the widespread Asian economic crisis more quickly than some of its embattled, but perhaps less resourceful, neighbors.

In his parting comments Tuesday after a two-day visit to Seoul, International Monetary Fund Managing Director Michel Camdessus praised the Korean people for their willingness to sacrifice to get their economy back on its feet.

“I am particularly touched by the Korean people’s patriotism,” he said. “You have won the first battle.”

But not the war, he added--unnecessarily. While Korea’s stock and currency markets have started to show signs of improvement in recent days and a coalition of international lenders agreed last week to roll over at least $20 billion worth of short-term private debt, there is widespread acceptance here that a long, bleak economic winter--lasting a year or two or three--lies ahead.

Motorists, Hospitals, Banks Are Affected

The plunging currency, the won, rising prices and interest rates, and belt-tightening have turned the country into an economic war zone, with the IMF as commander in chief. The IMF is overseeing a $60-billion international bailout of South Korea cobbled together in November when the economy began to implode under a mountain of foreign debt.

The fallout is piling up.

The jumbo jets flying into and out of Seoul’s Kimpo Airport are half-empty due to mass cancellations of overseas trips and a drop in business travelers.

Traffic in Seoul has been slashed by one-fourth. Hundreds of thousands of citizens no longer have jobs to commute to, while a huge jump in gasoline prices--30% over the past six months--has driven other people out of their automobiles and onto the subway and buses.

Business transactions are grinding to a halt as banks tighten up their lending and companies and individuals hoard their hard currency. This has hit importers particularly hard, since suppliers want payment in advance, and banks are reluctant to give out letters of credit.

Hospitals--which import 90% of their supplies--are delaying nonemergency surgeries because they are running out of things like surgical gloves, disposable needles and high-quality X-ray film--all of whose prices have doubled due to the depreciation of the won.

“So far, we haven’t had any surgery delays, but that could occur at the end of January if things do not get better,” lamented Kim Myoung Soo, a spokesman for Samsung Medical Center.

Prices of food, particularly imported meat, grains and processed foods, have skyrocketed, and some basics such as sugar are in short supply. Luxury department stores have slashed prices on imported products by 40% to 50%, filling their shelves with cheaper domestic-made clothing and appliances and secondhand goods.

The Korean news media, which are scrambling to stay on top of this unfolding fiscal crisis, must do more with less. Chosun Ilbo newspaper recently announced plans to reduce its pages by one-third, a move that others are expected to follow, and the major television stations have cut their daily air time by two hours.

Not surprisingly, economic insecurity has spread through the population like a virulent disease, fueled by daily reports of bankruptcies and corporate downsizing. Already, eight of Korea’s top 30 chaebol, or conglomerates, are in bankruptcy. The Daewoo Economic Research Institute predicts that as many as 121 companies listed on the Korea Stock Exchange could go bankrupt this year.

These harsh new times are being dubbed the “IMF era,” just as the rising lawlessness is sometimes characterized as “IMF crime”--reflecting the fact that some Koreans blame it not on their own national policies but on the reforms demanded by the IMF to address the country’s woes.

Yet this resentment seems outweighed by the bootstrap mentality.

Out With the Gold, in With Old Clothes

Impressive though it is, the collection of 15 tons of gold from citizens makes barely a dent in South Korea’s estimated $153-billion foreign debt. But the effort provides a badly needed rallying point for the battered nation, according to Richard Samuelson, head of research at the brokerage SBC Warburg Dillon Read here.

“It’s a way of drawing the population together in a time of crisis and creating a shared sense of responsibility,” he said. “It’s like the victory gardens in World War II. I’m not sure how many people they really fed, but that kind of thing has its place.”

Such patriotic frugality was on full display Sunday at Kim’s Club Outlet in Poondang, a suburb of high-rise condominiums an hour’s drive from downtown Seoul. The popular department store had set up a mini-swap meet on its sixth floor, where it was charging a 10% commission to broker used clothing, shoes and household goods.

Kim Young, 29, a Kim’s Club manager, said most Koreans would be embarrassed to wear used clothing in better times. But he said the popularity of the swap meet showed a “change in attitude” among customers fearful of their financial future and mindful of government calls to conserve and recycle.

Lee Hyun Ja, who was clutching a lime-green silk jacket on sale for $6, considers herself one of the converted. She said her husband’s construction business has been “dramatically affected” by the economic downturn, forcing her to reduce her trips to the grocery store, shop sales and become a regular swap market attendee.

“I am only a housewife, but I believe I can become a model for overcoming this crisis,” said the mother of two young children. “If everyone here can do this one by one, this crisis can be overcome.”

Another swap meet shopper, Kim Eun Zoo, fears he will be forced out of business if the won remains at its present depressed level. As the operator of a small jewelry importing company, he is caught between rising import prices and slumping demand here at home. He has already laid off two of his five employees.

Kim, who proudly displayed a beige overcoat he purchased for $6 at Kim’s Club, said he does nearly all his shopping now at swap meets and outdoor markets.

Newlyweds Say ‘I Don’t’ to Extravagance

Even weddings have not escaped the chill winds of the “IMF era.” The government crackdown on midafternoon feasts and the new austerity are bad news for the Kyusudang wedding hall in downtown Seoul, which makes 60% of its profit from selling food at the 20 to 50 weddings held in it monthly. And newlyweds are cutting back on more than just food.

When Min Byung Chae, 34, and his fiancee, Cho Oh Nam, visited Kyusudang last weekend to plan their April wedding, they shaved $1,200 off the final price tag by selecting less costly attire, flowers and photographs.

The couple also decided to spend their honeymoon at Cheju Island, a popular Korean resort, rather than making a hoped-for trip abroad and will move into a smaller apartment upon their return to Seoul.

Said Min, “All Koreans who are planning to get married are nervous about the future.”

* SOUTH KOREAN REFORMS: Four big conglomerates begin a called-for restructuring. D1