S. Korean economic crisis causes problems for University students

The turmoil of the South Korean economic crisis has forced several University exchange students to return to Korea because of financial constraints. The crisis is affecting both international students and Korean Americans in the University community.

"I know that a lot of exchange students are going back," said LSA first-year student Nam-Hee Park, who is from Korea.

The situation also has affected Korean students who remain at the University.

"I know that the students who come from Korea are having a hard time," said LSA sophomore Mina Choi. "They're getting more economical."

The crisis began in mid-November when several South Korean conglomerates collapsed. The conglomerates had financed their expansion by borrowing funds, which caused the banks to be saddled with bad loans, estimated at $26 billion. A credit crisis ensued, plunging the Korean currency, the won.

The won had lost half its value against the dollar by the end of 1997. The stock market's index fell to a nearly 10-year low. Eight of the top 10 South Korean conglomerates were bankrupt by the end of the year.

LSA senior David Shin said that the economic crisis has affected "almost everyone from Korea, both international students and students with parents from Korea."

Shin said that in Korea, the situation is "affecting all walks of life, from blue-collar workers to white-collar CEOs."

South Korea had to borrow $57 billion in an International Monetary Fund (IMF) package. The country received $21 billion from the United States, $10 billion from the World Bank and $4 billion from the Asian Development Bank. South Korea, the world's 11th largest economy, is now beginning to implement IMF economic reforms.

"A basic concern for everyone is that the IMF is pressuring Korea to lay off many workers. If that happens, a lot of people are going to be on the street. They won't be able to sustain themselves," Shin said.

"It's going to be very tough. The exchange rate is very high. It's not what Korea is used to," Shin said. "Korean citizens are trying to adjust and adapt to the situation."

In Ann Arbor, the economic crisis has primarily affected international students from Korea.

"I don't think that many Korean Americans are aware of it," said Shin.

But LSA senior and Michigan resident Michael Song said that "the economy is affecting everyone."

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