For President Lee Myung-bak, this is more than a passing problem, because middle-class economic concerns and a string of frauds and scandals have convinced South Koreans that theirs is anything but the “fair society” that he has touted.
Some South Koreans, Lee included, describe fairness as a prerequisite for reaching democratic maturity. But the value also contradicts the winner-take-all ethos that drove the country’s postwar boom, with the emergence of dominant conglomerates, an ultra-competitive education system and few social safety nets to help the non-elite.
In a fair society, Lee said, “the winner does not take all.”
The push for fairness has generated some unconventional test cases. Several months ago, Lotte Mart, a department store conglomerate, began selling buckets of fried chicken — so cheap that they sold out daily within hours. But small and medium-size chicken shacks couldn’t compete with those prices and protested the unfairness of it all. After five days, Lotte Mart surrendered, saying it would no longer offer cheap chicken, in deference to societal ideals.
But in the year since Lee’s fair-society speech, South Koreans have come to see fairness as an elusive ideal. While food prices and college tuitions rise, the bottom 20 percent of the population has seen its income plummet 35 percent in the past decade. As Seoul booms, far-flung provinces complain of neglect and struggle to attract businesses. Although the country’s growth was powered by tiger-strong “chaebols” — family-controlled firms such as Hyundai and Samsung — these corporations squeeze the middle- and small-size companies to whom they subcontract.
“In Korea, the strong people get everything,” said Kwak Seung-jun, chairman of a council that advises the president. “We are used to competition. . . . Right now, big companies are eating smaller companies.”
Lee’s advisers envision a process of growth by cooperation: The elites give more and gain social responsibility, the benefits trickle down, and South Korea becomes a more advanced nation. But all the while, Lee’s administration has been troubled by inveterate corruption, with illicit favors and bribery undermining the justice system, financial regulation and major business deals.
Some government ministries have lately tried to chip away at corruption by limiting or banning pricey dinners or golf rounds with associates. In a radio address this month, Lee said that corruption remains “rampant” in many parts of society. Some experts suggest that such corruption is the legacy of South Korea’s quick political transformation, as the country rose to power as an authoritarian state in the 1960s and 1970s, then formally transitioned to democracy in 1987.
South Koreans have watched with dismay in recent months as a savings bank scandal has widened to embroil financial regulators and a former presidential aide. Prosecutors describe an elaborate scheme in which Busan Savings Bank tipped off high-profile customers about its impending suspension, allowing them to withdraw funds. The bank also bribed financial regulators to look the other way while it cooked its books.
“I think this scandal, in a sense, has demolished the slogan of a fair society,” said Kang Won-taek, a political scientist at Seoul National University.
Even before Lee’s fair-society address in August, South Koreans had shown a growing keenness for social equality. “Justice: What’s the Right Thing to Do?,” a dense political philosophy book by Harvard professor Michael Sandel, sold several hundred thousand copies in South Korea. (Lee himself downloaded the e-book.)
Across university campuses this spring, South Koreans protested the cost of tuition — the third-highest among nations of the Organization for Economic Cooperation and Development. Compounding the tuition cost problems is a lack of scholarship options, forcing parents to rack up debt. Household debt in South Korea has climbed to 146 percent of income — worse than levels in the United States during the subprime mortgage crisis.
Even as South Korea’s aggregate economic numbers show growth, too many people’s lives are getting more difficult, said Hong Yun-sik, the federal deputy minister for the national agenda.
“There is definitely a gap between quantitative growth and qualitative growth,” Hong said. “We definitely need more growth in terms of quality.”
The challenge corresponds with skepticism about the government’s ability to lend help. Disenchantment with the Lee administration has driven down the president’s approval rating to roughly 28 percent — a contrast with his sterling reputation overseas, particularly within the Obama administration. Lee, who coordinated South Korea’s hosting of the Group of 20 summit in November, came into office with a reputation for business savvy. Early in his career, he became an executive at Hyundai. At the time of his election in December 2007, Lee vowed to push per capita income to $40,000.
Instead, during his tenure, per capita income has hovered at about $20,000. Lee, serving a fixed five-year term, has created a battery of task forces to devise and implement his fairness policies, but critics say he has also favored big businesses, while occasionally pardoning executives accused of major crimes.
Lee comes from a lower-income family. To help put himself through college, he worked as a garbage man.
“Personally, I knew him,” said Choi Jang-jip, a classmate of Lee’s at Korea University in the early 1960s. “In those years, if a student was working hard, he had a high prospect for getting a job and moving up the social ladder. But these days, it’s almost impossible to do.”
Special correspondent Yoonjung Seo contributed to this report.