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Beset by a sputtering economy, corruption scandals involving top officials, and a lack of progress in relations with bellicose North Korea, President Kim Dae-jung's popularity slid in 2001, while the conservative opposition geared up for the December 2002 presidential election. With Kim barred by the constitution from seeking reelection, his Millennium Democratic Party (MDP) party faces a bruising internal fight for the presidential nomination.
The Republic of Korea was established in 1948, three years after the United States and the Soviet Union divided the Korea Peninsula in the waning days of World War II. During the next four decades, South Korea's mainly military rulers crushed left-wing dissent, kept the country on a virtual war footing in response to the threat from Communist North Korea, and oversaw an industrialization drive that transformed a poor, agrarian land into the world's eleventh-largest economy.
South Korea's democratic transition began in 1987, when military strongman Chun Doo-hwan gave in to widespread student protests and allowed his successor to be chosen in a direct presidential election. In voting that December, Chun's protege, Roh Tae-woo, defeated the country's best-known dissidents, Kim Young-sam and Kim Dae-jung, who together split the reformist vote.
After joining the ruling party in 1990, Kim Young-sam defeated Kim Dae-jung in the 1992 presidential election to become South Korea's first civilian president since 1961. President Kim curbed the powers of the domestic security services, sacked hardline military officers, launched an anticorruption campaign, and successfully prosecuted former Presidents Chun and Roh for corruption and treason.
South Korea went through its worst financial crisis in several decades in late 1997, when slowing exports, a tumbling currency, and years of reckless corporate borrowing brought the country close to default on $150 billion in private sector debt. Seoul agreed to a $57 billion International Monetary Fund-led bailout in early December in return for pledging to restructure companies and end lifetime job guarantees. Amid public anger over the government's failure to better supervise the country's banks and business conglomerates, Kim Dae-jung became South Korea's first opposition candidate to win a presidential election on December 18, 1997. Backed by trade unions and his core support base in the southwestern Cholla region, Kim defeated two conservative candidates, Lee Hoi-chang of the ruling Grand National Party (GNP) and Rhee In-je, a ruling party defector.
With the government pumping billions of dollars into the banking system and investor confidence recovering, the economy grew by 10.7 percent in 1999 after shrinking 6.7 percent in 1998. Yet the Kim administration largely failed to take advantage of the rebound to persuade banks to shut down or restructure debt-ridden conglomerates. Instead, it organized rescues of Hyundai Construction and several other highly indebted companies. At the same time, Daewoo Motors and other companies seeking foreign suitors or pressed by foreign creditors laid off thousands of workers. Trade unions charged that workers were being forced to bear the brunt of the restructuring costs.
Despite losing some union support, Kim's MDP picked up seats in the April 13, 2000, elections for the 273-seat parliament, though the GNP retained its plurality. Under a record-low 57 percent turnout, the GNP won 133 seats, up from 122 in 1996, compared to 115 for the MDP, up from 99 in 1996. Smaller parties and independents took the remaining 25 seats. During the campaign, the GNP criticized the administration's economic restructuring plans as well as the speed of Kim's rapprochement with hardline North Korea. Kim's so-called sunshine policy toward the North led in June to the first-ever summit meeting between leaders of the two countries. The government ran on its record of returning economic growth to double-digit levels. However, the unemployment rate, at five percent, remained above pre-crisis levels, and wages for most workers remained lower than before the crisis.
Kim, 76, saw his popularity slide in 2001 as companies sacked thousands of workers amid tumbling exports and slowing economic growth. Weakened by the global economic slowdown and the steep drop in technology spending in the United States, South Korea's economy grew by less than two percent in the year to the third quarter, compared to 8.8 percent in 2000. Exports of computer chips and other goods made up 38 percent of gross domestic product in 2000.
Adding to the country's economic problems, many Korean banks are still saddled with bad debt even though the Kim administration has spent more than $90 billion to shore up the financial system. State-owned banks, moreover, continue to prop up large, bankrupt companies. Blue-collar anger deepened during the year, as workers and police clashed violently several times during protests over layoffs at big industrial companies and the proposed sale of bankrupt Daewoo Motors to U.S.-based General Motors. Kim also faced fallout from a series of bribery scandals involving top officials and a failed attempt at health care reform in 2000. Polls showed Kim's approval rating at an all-time low of 20 percent in August.
Lee Hoi-chang, the GNP president who lost to Kim in the 1997 election, is widely expected to again be his party's standard-bearer in the 2002 vote. At least eight men have signaled their interest in seeking the MDP's nomination in a primary expected as early as March 2002.
Sharpening their attacks on Kim and his party ahead of the election, Lee and other opposition leaders slammed the president during the year for supposedly having little to show for his June 2000 summit with North Korean leader Kim Jong-il. In September, Kim sacked his minister in charge of North Korea policy, Lim Dong-won, after a small coalition partner voted with the opposition in a no confidence motion against Lim. The move left the MDP with a minority government and complicated Kim's efforts to score a breakthrough with Pyongyang before he leaves office.
South Koreans can change their government through elections and enjoy most basic rights. Human rights problems include the government's use of a harsh security law to detain dozens of dissidents, the jailing of some journalists under criminal libel laws, and discrimination against women.
The 1988 constitution vests executive powers in a directly elected president who is limited to a single five-year term. The national assembly is directly elected for a four-year term. It currently has 227 single-member, simple-plurality seats and 46 seats elected by proportional representation. The prime minister, currently Lee Han-dong, is responsible to the president.
South Korea's judiciary is independent, although "several scandals in 1999 involving alleged illegal influence peddling and cronyism have damaged the image of prosecutors and judges," according to the U.S. State Department's February 2001 report on South Korea's human rights record in 2000. In a positive development, human rights groups say that incidents of police abuse of suspects in custody have decreased in recent years.
A former dissident, Kim has released dozens of political prisoners held under South Korea's broadly drawn National Security Law (NSL). At the same time, his administration has used the law to arrest hundreds of students, labor leaders, political activists, and others for peaceful activities that allegedly aid or support North Korea. These include traveling to North Korea without official permission; praising the North, its leaders, or its state creed of "self-reliance"; or producing, selling, or distributing pro-Pyongyang literature. Authorities also use the NSL to arrest South Koreans accused of spying for the North. Courts have handed down suspended sentences or short prison terms to most NSL detainees, but long prison sentences to others. Overall, South Korea appears to hold "under 200" political prisoners and detainees, the U.S. State Department report said. The government says it needs to continue using the law against suspected dissidents because of the continued threat from North Korea.
South Korean newspapers are privately owned and report fairly aggressively on government policies and alleged official wrongdoing. In a setback for press freedom, courts have in recent years jailed several journalists under criminal libel laws. Media rights groups say that politicians and businessmen use the libel laws to punish journalists for articles that are critical but factually accurate. Raising questions about the quality of South Korean journalism, a survey showed that about a fifth of 703 journalists interviewed admitted being paid by their sources, the London Economist reported in June.
In a controversial move, the National Tax Service in 2001 fined 23 media companies a record $390 million for tax evasion. Tax authorities also filed related criminal charges against five media executives and arrested three of them, including the owners of South Korea's two largest newspapers, Chosun Ilbo and Dong-a Ilbo. The opposition GNP accused the government of trying to gag the press, which has been critical of Kim's economic reform policies and overtures to North Korea. Many civic groups and the Brussels-based International Federation of Journalists, however, viewed the cases as ordinary tax evasion matters.
Women face employment discrimination in the private sector and are frequently the first to be laid off when companies restructure, according to the U.S. State Department report. Parliament in 1999 stiffened the penalties for companies that discriminate against women in hiring and promotions, although the effect of the changes, if any, is not clear. Violence and sexual harassment against women continue to be serious problems. Women's groups say that rape and sexual harassment generally are not prosecuted and that convicted offenders often receive very light sentences. There were officially 6,359 rapes in 1999, while a 1997 survey found that 31.4 percent of South Korean households had experienced domestic violence during that year, the U.S. State Department report said.
Trade unions are independent and practice collective bargaining extensively. However, the law places some legal restrictions on labor rights, enforcement of labor laws is often lax, and the government has in recent years arrested some strike leaders. The law prohibits defense and white-collar government workers from forming unions, although the latter can form more limited workplace councils. It also bars strikes in government agencies, state-run enterprises, and defense industries. The 1998 Trade Union Labor Relations Adjustment Act will permit multiple unions at the company level beginning in 2002. As of 1999 only about 12.6 percent of workers were unionized.
Authorities rarely prosecute employers for labor violations. These offenses include illegally firing workers or subjecting foreign workers, who number about 235,000, to beatings, forced detention, withheld wages, and seizure of passports. At the same time, the Kim administration has prosecuted some workers for organizing illegal strikes or instigating violent strikes. President Kim apologized after riot police in April beat and injured dozens of protesting Daewoo workers who were trying to force their way into their plant in Pupyong, west of Seoul.
Despite recent anticorruption initiatives, anecdotal reports suggest that bribery, extortion by officials, and influence peddling continue to be pervasive in politics, business, and daily life. The Berlin-based Transparency International's 2001 Corruption Perceptions Index rated South Korea in a tie with Greece as the 42nd most corrupt country out of 91 surveyed.
Because citizenship is based on parentage rather than place of birth, many of South Korea's 20,000 ethnic Chinese residents face difficulty in obtaining citizenship. This makes it hard for them to get government jobs. Ethnic Chinese also face discrimination in mainstream society, according to the State Department report.
As president, Kim has done relatively little to bridge South Korea's long standing political divide between the southwestern Cholla region, his support base, and the southeastern Kyongsang region, the stronghold of the conservative opposition and past military rulers. Most of Kim's appointees to top public offices and his advisors are from Cholla.