[KS] How unequal is South Korea, really?

Brother Anthony ansonjae at sogang.ac.kr
Wed Aug 30 02:19:20 EDT 2006

I expect we have really reached the end of this thread, but the 2 following detailed reports reflect the 
extent to which the mood in Korea at present is not a happy one, I think. We all know now that the annual 
budget of Seoul City is 15 Cho Won, because the news announcers enjoy stressing that the amount involved in 
the gift certificate / gambling scandal is double that. These from the Korea Times in the last 2-3 days

1. Household debts reached a new high of 546 trillion won ($550 billion) in the second quarter as demand 
for housing loans posted stronger growth despite the government’s steps to stem real estate speculation, 
the central bank said Monday. The Bank of Korea (BOK) said household debts grew 16.7 trillion won during 
the April-June period from the previous quarter, the fastest growth pace since the third quarter of 2002, 
when a credit card bubble was at its peak. The new figure means each household had 34.4 million won in 
debt, the largest amount ever, as of the end of June, compared to 33 million won three months earlier. 
Loans to homebuyers accounted for 53.8 percent of outstanding household debts as of the end of June, the 
BOK said. Currently, more than 98 percent of aggregate housing loans _ standing at some 250 trillion won _ 
are tied to a floating interest rate, which changes in accordance with the movement of key interest rates. 
The BOK said Korean households will have difficulty in improving their debt payment capability due to 
rising debts without income growth.

2. The 19 companies issuing gift certificates are now at the center of suspicion. The owners of the 
companies, alleged to have issued nearly 30 trillion won (about $30 billion) worth of gift certificates 
since August last year, are banned from taking overseas trips. The video gambling games gained explosive 
popularity after game parlors allowed clients to illegally cash in their vouchers. That illegal policy 
brought windfall profits overnight to voucher issuers. Collusion and influence peddling appear to have run 
rampant in designating voucher publishers. The National Intelligence Service (NIS) said in a report 
released Friday that crime organizations control much of the gift distribution networks used for gambling. 
The gambling game market is worth nearly 88 trillion won and the amount of taxes being evaded by game room 
operators would reach some 8.8 trillion won.

Brother Anthony
Sogang University, Seoul

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