The IMF Economic Crisis and Gold Collection Movement

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The financial crisis that started in Thailand in July 1997 gripped many of the East Asian economies, and the South Korean financial system was also hit hard by November. Incited by fears of an economic meltdown, foreign institutions demanded rapid payback of their foreign currency loans. As a result, Korean financial institutions requested emergency funding from the Bank of Korea which ultimately exhausted foreign-exchange reserves. The country was on the verge of bankruptcy.

South Korea's national debt was over 150 billion USD, but its foreign-exchange reserves fell below 4 billion USD. In the end, the Korean government had to rely on a bailout package from the International Monetary Fund (IMF) under the condition that it accepted the IMF's harsh demands for restructuring of corporate governance and reforming the labor market.

Koreans were shocked to find that their country was heading towards a bankruptcy. Mobilized by patriotism, they voluntarily campaigned to collect gold to help the country repay its foreign debts. This was initiated by the Central Council of the Saemaul Women's Club that launched the Patriotic Ring Collection Movement.

This "national debt repayment movement" was modeled after a similar public fundraising campaign organized 90 years earlier during the late Joseon period. To help pay off the nation's enormous foreign debts, men quit smoking and drinking while women sold their wedding gifts.

In January 5, 1998, the Korean Broadcasting System (KBS) launched a national gold collection campaign, in which the Bank bought gold from citizens at a fixed rate. Gold thus collected was sold abroad to earn money to pay off the foreign loans. Tens of thousands of Koreans donated gold objects that carried personal and familial significance, far beyond their monetary value. Newlyweds donated their wedding rings while parents donated their children's birth celebration rings. Gold-medalists also gladly brought their medals while war veterans gave their military insignias for the national cause. Cardinal Sou-hwan Kim, one of the most respected figures in Korea, donated the gold cross he received for his anointment.

3.5 million Korean citizens nationwide participated in this campaign and 227 tons of gold were collected. The gold earned Korea around 2.2 billion USD, which was equivalent to 10% of the IMF's bailout. The campaign ended in late April. Thanks to the campaign, Korea could successfully overcome the financial crisis sooner than anticipated.

In commemoration of the 70th anniversary of Korean liberation, a broadcasting station conducted a survey on what Koreans consider as the historical moments that made them proud of their country. Many chose the gold collection campaign during the financial crisis as one of such moments.

International media reporting on Koreans' efforts to overcome the national crisis praised self-sacrifice of South Koreans. An IMF official also commented in an interview with KBS that he had never seen anything like this in any other countries that received IMF's bailout package. Today, the national gold collection campaign stands as one of the most moving shows of patriotism the world has ever known.

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