is under attack from Protestants. During the 1980s and 1990s, groups of fervent Protestants entered Buddhist temples and destroyed property, even committing arson. In one case, at Muryangsa Temple on Samgak Mountain in Seoul in 1984, crosses were daubed on Buddhist paintings, and Buddha statues attacked with axes.
Social Network
Korean society traditionally emphasizes the group over the individual. A church provides for the spiritual needs of its followers, but it also provides an affiliation and a network that responds to the need to belong. Even people who are not especially religious may attend a church because their friends go there, and for many middle-aged women it is a meeting place and support group. As Korea has been a society in which women were mostly excluded from public life until the most recent generation of adults, church gave them a sense of involvement in something wider than the bounds of the family home.
Koreans abroad, including those who never went to church back in their own country, often find friends of their own nationality by attending Korean services. Over 70 percent of Korean-Americans attend church regularly, according to Min Pyong-gap and Kim Jung-ha in their book, Religions in Asian America. This is several times higher than the rate of church attendance in Korea itself, and the main reason for that is the social role the church plays—that of the community center for people of Korean origin living in the midst of a non-Korean culture.
Some miss out on the collective setting furnished by churches, though. It is well known that South Korea has one of the world’s highest rates of Internet usage (and the fastest broadband speeds). Perhaps incongruously, Web culture impacts upon church attendance, for it is possible to “attend” many churches virtually, sitting in front of one’s computer screen and singing along to hymns via live-streaming video. With Koreans working the longest hours in the OECD and church membership among young people now actually in decline, even the strongest religion in Korea must adapt to social change and embrace new methods.
Chapter 5
Capitalism with a Korean Face
Anyone can tell you that North Korea is communist and South Korea capitalist, but what do these words mean? Authorities in the North frequently turn a blind eye to street markets and encourage investment from prospective foreign partners seeking to make a profit out of cheap labor. And in the South, capitalism is still evolving, but has some very distinctive characteristics based both on old influences like Confucianism and the unique means of industrial development known as the chaebol system.
Park Chung-hee
During the 1950s, South Korea was “the poorest, most impossible country on this planet,” according to a long-time advisor to President Park Chung-hee, Kim Dong-jin (not his real name). The Korean War had made a third of the population homeless; orphaned children roamed the streets looking for food; GDP per capita was far below $100; and, the government was utterly dependent upon foreign aid, principally from the United States. Politically, things were no better. President Syngman Rhee presided over a regime as bloody and repressive as it was corrupt.
When student protests sent Syngman Rhee fleeing to Hawaii in 1960, South Korea engaged in a brief experiment with democracy under the government of Prime Minister Chang Myon and President Yoon Po-seon. Unfortunately, the country was in turmoil—with severe factionalism, a currency crisis, and Communist agitation—and these leaders could not hold things together. Han Seung-joo, an anti-Rhee demonstrator who dodged the bullets that killed over a hundred of his comrades and eventually went on to become a cabinet minister in the 1990s, recalls, “There was a sense that we weren’t going to make it as a country.”
In this circumstance, army general Park Chung-hee took his chance. On May 16, 1961, he seized power, and he soon started putting in place the changes that would make South Korea a wealthy country. General Park—later President Park—is the one person who undoubtedly had the greatest influence on this country, for both better and worse. He remains a divisive figure due to his autocratic rule, but credit for his contribution to the economy should never be overlooked.
General Park was no Ayn Rand–style free-marketeer. In fact, long before he came to power, he was nearly executed for being part of a Communist cell. Immediately following his takeover in 1961, he rounded up businessmen and subjected them to public humiliations, such as being forced to march through the streets carrying placards proclaiming, “I am a corrupt swine.” He was not being unreasonable: during the 1950s, entrepreneurs close to the Rhee government were able to grow quickly by purchasing assets abandoned by Japanese colonialists, such as factories, at knock-down prices. Once a firm began producing a certain product, the government would block importation of competing goods from overseas. Firms that benefited from this protectionism included Samsung—still the largest business group in Korea today.
Samsung founder Lee Byung-chul, the most successful entrepreneur of 1950s South Korea, was in Japan at the time of General Park’s coup. The new regime alleged that Lee held one-fifth of the nation’s illicitly acquired wealth, had given illegal political donations, and had evaded taxes. He was somehow persuaded to return to Korea and was immediately jailed. Yet the talented and persuasive Lee managed to make a deal with General Park, offering to “donate” most of his wealth to the state and use his influence to persuade other entrepreneurs to follow the economic plans General Park was then drawing up. This offer was accepted, and Lee was made head of the new Federation of Korean Industries, an organization that to this day represents the interests of the largest Korean firms. General Park’s objective was to pursue industrial development, in order to make the country more powerful than North Korea and dig South Korean people out of poverty. In negotiating with Lee he realized that the “corrupt swine” could be instrumental in achieving this goal if their organizational expertise could be put to work in the ways he wanted.
With that in mind, General Park offered eighteen leading entrepreneurs a deal they could not refuse: participate in his development plans or go to jail. These business leaders included the founders of companies like flour miller and cement-maker Daehan and cotton-spinner Samho, who, along with Lee Byung-chul, had been heavily fined for tax evasion and the paying of kickbacks. The fines they paid were reinvested by the government in projects that General Park had asked the chosen companies to develop. As part of the government’s first Five Year Economic Plan laying the foundations for industrial development for 1962 to 1967, the focus was set on areas like fertilizer production, cement, chemicals, oil refining, and textiles,
Later, the number of firms able to participate in the club was expanded: Kim Woo-choong, who was still in school during the Rhee era, founded Daewoo in 1967 and, perhaps owing to the fact that his father used to teach President Park, was able to join. Daewoo was originally a textile firm but also ended up making electronic goods, cars, and ships, in accordance with subsequent government economic plans. In fact, Kim entered the shipbuilding business against his will—Park forced him to do it. Daewoo Shipbuilding & Marine Engineering Ltd. now generates annual revenues of over U.S. $10 billion.
Though these were the largest firms in Korea, at the time they lacked the resources required to enter such capital-intensive industries as shipbuilding and car manufacturing. However, the government was relatively flush with infusions of cash from U.S. government loans and later from payments for participation in the Vietnam War, as well as soft loans and compensation from Japan for its depredations during the colonial period. The state could therefore fund favored firms through its national banks, at rates of interest much lower than the 25 to 30 percent interest rates offered on the open market at the time. In 1964, 40 percent of all money loaned by Korean banks was shared between just nine business groups.
Corruption still existed, owing to the close relationship between government and business. It was typical for kickbacks of up to 10 percent to be paid to high-ranking officials when loans were made. Thus Lee Hu-rak, the president’s chief of staff, was able to garner an illicit fortune of a reported U.S. $40 million. A mutually beneficial relationship between the political and economic elites developed: companies received cheap loans and were able to expand, and officials got their cut. The incentives were lined up then for firms to take on