A year for economic heartache

Economy

Published: 31 Dec. 2008, 10:59

A year for economic heartache

The Kospi index plummets below 1,100 in the aftermath of the New York stock plunge on Nov. 6. [YONHAP]

Worst economic news in a decade

This year has certainly been the most turbulent for the Korean economy in the past decade.

The year started with high hopes as the stock market exceeded the 2,000 mark in the months leading up to 2008. The financial industry was enjoying hefty earnings as fund sales continued to flourish while exports saw continuous two-digit growth.

However, shadows of uncertainty and insecurity lurked as the cost of raw materials began to escalate. This included the price of crude oil, which hit a record high of $147 per barrel in July.

The thriving financial market saw the tables turn as rumors spread rapidly that foreign investors would pull out of the country en masse in September.

The financial industry was involuntarily caught up in a global crisis after the collapse of Lehman Brothers. Korea’s stock market fell by half less than a year after breaking the 2,000 point barrier. The local currency, which was depreciating against the U.S. dollar, finally reached a record 1,500 won per dollar in November.

The financial crisis spilled over to the real economy. Unemployment went up while companies started to cut back. The government presented various measures, but the market’s response never lasted very long.

The worsening economy reminds people of the economic nightmare experienced 10 years ago during the Asian financial crisis. The government changed next year’s growth target from 4 to 5 percent to 3 percent.

The market, however, is slowly starting to stabilize with the Korean won currently moving in the 1,200 to 1,300 won level. The stock market has settled at around 1,100.

Protesters stage a candlelight rally on June 10 in central Seoul against the resumption of U.S. beef imports. [YONHAP]

Candlelight vigils numb the nation

The Lee Myung-bak administration struck a deal with the United States on April 18 to reopen Korea’s markets to U.S. beef imports. The decision prompted candlelight vigils in central Seoul that confronted the government for apparently risking people’s health and Korea’s sovereign right for quarantine and inspection.

Ten days after the deal was inked, MBC’s current affairs program “PD Diary” aired a show titled “U.S. beef, is it safe from mad cow disease?” fueling public anger. An Internet community, Agora, whipped up anti-government feelings and demonstrations to demand the renegotiation of the terms of the import deal dominated the headlines.

At the end of June, Seoul and Washington held additional negotiations and agreed to ban imports of U.S. beef from cattle older than 30 months.

According to the Korea Economic Research Institute, the protests cost the Korean government and businesses some 3.75 trillion won ($2.97 billion).

Kumgang death throttles inter-Korean relations

On July 11, 53-year-old South Korean housewife Park Wang-ja was killed by s North Korean solider during a trip to the Mount Kumgang resort.

The incident, still shrouded in mystery, reduced deteriorating inter-Korean relations to new lows. Seoul immediately halted the 10-year-long tourism programs to Mount Kumgang and implored the international community to increase pressure on Pyongyang to cooperate with the Seoul government’s proposed joint investigation.

A scheduled shipment of food and economic aid to the North was put on hold as Pyongyang blamed Seoul for the incident and suddenly took issue with South Korean civic groups sending anti-Pyongyang leaflets via balloons to the North.

Citing the leaflets, the North Korean military stopped Kaesong tourism and significantly restricted overland traffic to the Kaesong Industrial Complex, leading to fears that the inter-Korean economic project would be scuttled.

The funeral for the actress Choi Jin-sil, who killed herself at her home on Oct. 2. [YONHAP]

Suicide sparks legal wranglings

The country went into deep shock when actress Choi Jin-sil was found dead in her apartment in Jamwon-dong, southern Seoul, in October. She was said to have been suffering from extreme levels of stress over Internet rumors concerning her involvement in a loan shark transaction that might have provoked television star Ahn Jae-hwan into killing himself in September.

Choi’s suicide prompted calls to strictly prohibit the posting of insults in cyberspace, while civic groups proposed amending the current parental rights law that says a divorced parent who has given up his or her parental rights can regain custody if the other parent dies.

Former baseball player Cho Sung-min, whom Choi divorced in 2004, regained his parental rights to the couple’s two children after Choi’s death. After weeks of legal wrangling between Choi’s family and Cho, the ex-husband yielded his rights once more.

Korea’s National Treasure No. 1, Namdaemun, burns down on Feb. 11. By Kim Min-gyu

Treasured loss is a burning issue

Namdaemun, Korea’s National Treasure No. 1 and a major tourist attraction in central Seoul, was destroyed in a fire on Feb. 11, 2008.

The landmark, officially called Sungnyemun, was the oldest wooden structure in Seoul, dating back 600 years.

In the aftermath of the incident, the chief of the Cultural Heritage Administration, the government body in charge of maintaining cultural and historical artifacts, took the blame for the incident and quit his post.

Chae Jong-gi, 70, the arsonist, was sentenced to 10 years in prison. Full restoration is scheduled for completion in 2012.

Highs and lows of world oil costs

It’s been a roller-coaster ride for oil this year. West Texas Intermediate, or WTI, peaked at $147.27 per barrel on July 11, and Dubai crude, Korea’s benchmark, hit a high of $140.70 per barrel on July 4.

Due to skyrocketing oil prices, gas-guzzling sport-utility vehicles gave way to motor bikes, cycles and compact cars. Some gas stations even concocted their own illegal fuel, and the price of diesel outpaced gasoline, causing financial hardship for truck and taxi drivers.

WTI and Dubai crude have dropped lower than $100 per barrel. WTI finished at $39.91 per barrel on Dec. 22, while Dubai crude closed at $40.44 per barrel on the same day.

The world awaits Kim Jong-il’s fate

When he was a no-show at the regime’s 60th anniversary party on Sept. 9, the rumor mill went into overdrive, as North Korea’s Kim Jong-il has rarely missed a publicity moment for the ceremony.

Intelligence officials from South Korea and the U.S. claimed the 66-year-old suffered a stroke in August and had brain surgery.

With the prospect of Kim’s rule faltering, governments in the region and beyond began to fret that the country might implode.

In October, the North claimed that Kim had made several public appearances around the country, but there was little supporting evidence.

Korea takes first steps into orbit

The first Korean astronaut, Yi So-yeon, gives the thumbs up on April 8. [REUTERS]

Yi So-yeon, a senior researcher at Korea Aerospace Research Institute, has become the first Korean astronaut, boarding the Soyuz spacecraft launched in Kazakhstan at 8:16 p.m. Korean time, on April 8. The trip made Korea the 36th country to send an astronaut into orbit.
During the 10 day-orbit, Yi conducted 18 scientific experiments. She returned to Earth at 5 p.m. on April 19, Korean time.

Golden Olympic haul for Korea

Thirteen was the lucky number this summer for the Korean Olympic delegation in Beijing.

Korea picked up a record 13 golds and added 10 silver and eight bronze to finish in seventh place overall.

It started with gold on the first day of competition on Aug. 9 when judo’s Choi Min-ho won the men’s 66-kilogram division. Park Tae-hwan won the historic gold in men’s 400-meter freestyle swimming, the nation’s first Olympic swimming medal of any color.

The female archery team claimed their sixth straight Olympic gold. Korea sent four athletes in taekwondo and they brought home four gold medals.

And then Korea won gold in baseball after it defeated Cuba 3-2 in a compelling final.

The 13 gold medals were one more than Korea’s total at the 1988 Seoul Olympics and the 1992 Barcelona Olympics.

Bird flu was no sneezing matter

The first confirmed outbreak of bird flu this year was at a poultry farm in Gimje, North Jeolla, on April 1.

Public concern over the spread of bird flu reached a peak when the disease moved closer to the metropolitan area one month later.

In August, the government declared itself a bird flu “clean zone” after three months without a confirmed case of a human infection.

A total of 43 confirmed H5N1 outbreaks of avian flu were reported across the nation from April to July, resulting in the culling of 8.46 million birds at a cost of around 264 billion won, which was a sharp blow to the poultry and state zoo industry.

This year’s outbreak of bird flu was the most serious in Korea with 33 cases of the virulent H5N1 strain that can be transmitted to humans.

Roh’s older brother arrested for bribery

Roh Geon-pyeong, 66, brother of former President Roh Moo-hyun, was indicted on Dec. 22 on charges of fraud involving Nonghyup’s takeover of Sejong Securities in 2006.

Roh Geon-pyeong allegedly received 3 billion won in bribes from Sejong Capital’s chief executive officer, Hong Ki-ok, who was charged for giving bribes.