Not Your Average K-Drama: Chaebols in Crisis, 1997

Approximate Committee Size: 28 Delegates

South Korea’s rapid economic development during the 1970s was influenced by a myriad of factors, such as a coup d’etat in the government, American assistance, and massive mobilization of the middle class, but chief among them was a special preference shown towards “chaebols”: large, family-owned conglomerates that often held a monopoly or duopoly over an entire industry. Starting from the First Five Year Plan, these chaebols were favored by a government policy of “guided capitalism”: select companies were chosen to undertake projects, and guaranteed funds from both domestic and foreign loans. The government-chaebol cooperation was critical to the rapid economic development of South Korea, but it also created a culture of extreme concentration of wealth and capital power in the elite, leading to modern dramatizations of uber-wealthy, snobby families practically drowning in money and petty drama. But, the higher you climb, the harder you fall.  In June 1997, Chung Tae Soo, founder of Hanbo Steel, was sentenced to jail for 15 years for bribery and embezzlement, along with his son.  This concluded a months-long trial that exposed significant weaknesses in the Korean economic system and the extent of government corruption and bribery. Historians and economists point to this “Hanbo Scandal” as one of the triggers of the 1997 Asian Financial Crisis, as foreign investors began pulling out in droves, leaving Korean banks and conglomerates struggling in the wake. Now, delegates will take on the roles of senior figures in government and business as they struggle to contain the fallout and reform the Korean financial system, before the crisis gets worse.

ISSUES TO CONSIDER

Chaebol Reform in the 1997 Asian Financial Crisis

Overseas Expansion and International Operations

The Y2K Bug and Social Unrest

LEARNING OBJECTIVES

• Understand the critical role that business has on international stability, transnational politics, and most importantly, the impact that reckless policies can have on ordinary people.

• Learn about the 1997 Asian Financial Crisis, known as the IMF crisis in Korea, and an economic system that’s fairly different from the traditional Western model.

• Consider the impact of the Y2K phenomena on business operations, Asian politics, and economies.

About the Chair

Carly Liao is a Regional and Comparative Studies major concentrating on Asia and the United States in the School of Foreign Service class of 2027. She is originally from Palo Alto, California, and competed in Model UN throughout high school. At Georgetown, Carly is involved with the Blue & Gray Tour Guide Society, the Georgetown Journal of International Affairs, and the Asian American Student Association. In her free time, she enjoys reading contemporary fiction, listening to The Intelligence from The Economist, and trying new restaurants in DC. She is deeply interested in economic development, East Asian politics, and K-dramas. Carly hopes to bring these topics to life in committee and looks forward to a wonderful NAIMUN LXII!

About the Crisis manager

Annabelle Kim is a Public Policy major and Applied Economics/Data Science minor in the College of Arts and Sciences, class of 2027. She calls the San Francisco Bay Area home–Pleasanton, CA to be specific. In high school, she competed in Model UN, worked on the school board, and volunteered with (read: was bullied by) small children, which grew her interest in educational policy. At Georgetown, Annabelle is involved in Georgetown’s MUN travel team, running NCSC LII (NAIMUN’s collegiate counterpart), the student newspaper, Jumpstart for Kids, the Student Advocacy Office, and educational research. When not staring at a small or medium screen, Annabelle occupies her time embroidering, antiquing, watching sci-fi, curating Spotify playlists, and paying a lot for artisan coffee. Her personal curiosity in South Korean economics and development stems from extensive research into the U.S.-Korea relationship; certainly, her avid love for Korean melodramas was an influential factor as well. Annabelle cannot wait for NAIMUN LXII.