Geek in Korea by Daniel Tudor

Author:Daniel Tudor
Language: eng
Format: epub
ISBN: 978-0-8048-4384-3
Publisher: Tuttle Publishing

Choi Jae-seung (Richard Choi), founder of Spoqa/Dodo.

WHAT IS A CHAEBOL?

Have you visited Korea and wondered why it is that a single company is able to sell you a trip on their coach, duty free goods in one of their stores, and a chocolate bar as a quick snack on the way back to the hotel that they also own?

The answer is “Park Chung-hee.” President Park was the military strongman who ruled Korea from 1961–1979, and who divided Korean industry up amongst an elite club of insiders. He saw the impact that zaibatsu conglomerates like Mitsubishi had on turning Japan into a rapid-growth industrial powerhouse, and decided that this was what Korea needed, too. So instead of having a proper free market, company X was told to make cement, ships, and food, while company Y would make electronic goods and clothes, for instance. This was all conducted in accordance with a succession of “five year plans” introduced by Park himself. Over time, the companies best able to fulfil Park’s demands were able to expand into a whole range of industries, and dominate them with his blessing. They became true conglomerates.

The closest Korean word to “conglomerate” is “chaebol” (a more literal meaning of chaebol is “financial clique”). In spoken Korean, however, another word is often used to describe them: daegieop, which just means “big business.”

President Park lent the chaebols money at low rates of interest, and gave them government contracts, providing they did exactly what he wanted. Daewoo, which is most famous in the West for making cars, is also one of the world’s largest shipbuilders—but not by choice. Founder Kim Woo-choong only entered the shipbuilding industry because President Park forced him to. Meanwhile, those who weren’t part of the club found it virtually impossible to grow at all, because all the attractive markets were already occupied by Park-selected companies.

Over the years, several chaebols have come and gone. Daewoo itself went bankrupt in 1999, in the wake of the Asian financial crisis. Today, a definite hierarchy of chaebols exists, and a few top dogs have emerged. Some you will definitely know, and others you might not. Who are the kingpin chaebols, then?

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