Reforming the Miracles: Korea after the Financial Crisis

This article explains the causes and characteristics of the 1997 crisis in Korea, at the same time as it establishes an interesting parallel with the Mexican case of 1982 and 1994. The work is divided into six sections. In the first, Garza Limón reviews the characteristics of the 1997 Korean crisis and highlights similarities with the 1982 and 1994 Mexican crises. In the second, he explains the development of “the Han River miracle”, thanks to which Korea attained enormous economic growth and become the eleventh economic power in the world. In the third section, he describes the transition from economic miracle to crisis; he demonstrates how bad management of business conglomerates, known as chaebols, on which the national prosperity rested, led to high vulnerability of the country’s financial apparatus. The fourth section describes the outbreak of the crisis, the inefficient government struggle to avoid it and the intervention by the International Monetary Fund (IMF) in order to avoid the country going bankrupt. The fifth section analyzes the characteristics of the agreement with the IMF, many of which have turned out to be painful for Korean society, since they radically change its economic and social structures. In the last section, the author gives an interesting perception of the Korean government’s efforts to recover, not only economically, but politically, as well as of the consequent benefits that bilateral, commercial and intra-company exchange with this Asian country could have for Mexico.