The Chaebols of South Korea

The period between 1979, (after President Park's death), and 1988 (the year when South Korea adopted a new constitution and a democratic government was established), was a period of social unrest, labor strikes, student radicalism and political tension. Maj. Gen. Chun Doo Hwan had taken over as President of South Korea and the country was under martial law. In 1988, President Roh Tae-Woo assumed office after winning the general elections and normalcy returned to the country. Beginning in the late 1980s, the Chaebols were again at the center of South Korea's economic development. In order to build a strong industrial economy, South Korea encouraged its Chaebols to invest heavily in highly capital-intensive industries, such as petrochemicals, steel, ship building, cars, semi conductors, etc...

In early 1998, Kim Dae Jung took over as the President of South Korea. He defined a clear strategy to correct the weaknesses in South Korea's economic setup. In 1998, the South Korean government approached the International Monetary Fund (IMF) for assistance to bail the country out of the crisis. The IMF offered $58 billion as a relief package to South Korea on the condition that the government would take measures to restructure the Chaebols and their functioning...