Gold-collecting campaign

On July 2, 1997, Thailand changed its 13-year-old fixed exchange-rate system. As the exchange rate changed, the price of Thai baht in the foreign-exchange market fell. This was a cause of the East Asian financial crisis.[3] On May 21 of that year, the IMF was asked to provide liquidity-adjustment funds.[3] At the time, the real cause of the foreign-exchange-liquidity problem was controversial.[3] The domestic foreign-exchange market lacked dollars, the South Korean won exchange rate increased, and some financial institutions were unable to repay their foreign debts.[3] Foreign borrowing by financial institutions was blocked, making it difficult to repay a short-term external debt of $30 billion and a long-term external debt of $45 billion.[3] The Kim Dae-jung government persuaded the South Korean people to participate in the Gold-collecting campaign to overcome the nation's debt to the International Monetary Fund. The campaign was reminiscent of the previous "Repay debt movement" or "Korean production movement" in 1907.[4][5][6] A "one-dollar collection campaign" received little attention. The Korean Broadcasting System proposed a "gold-gathering movement" beginning on January 6, 1998, which received nationwide attention.[3]

The nationwide gold-collecting campaign was announced on December 25, 1997, when KBS1 first reported the proposal.[7] On January 5, 1998, KBS1 began the campaign with the Housing Bank.[7] The campaign was developed by a number of media organizations following the KBS report. Gold was received by six banks: Housing Bank, Nonghyup, Kookmin Bank, Korea Exchange Bank, Saemaeul Bank, and Industrial Bank. The campaign had two facets: KBS's "love of nation" and the MBC TV and civic-organization "foreign-debt repayment".[7]

The campaign was conducted from January 5 to April 30, 1998. On January 5, 1998, 3,314 kilograms (7,306 lb) of gold was received in 44,748 consignments. On January 5 the number of participants exceeded 500,000, doubling (to one million) by January 15.[8] The first KBS campaign ended on January 31, with 1,669,555 participants, and the second campaign was held from February 5 to February 21.[8] A total of 314,515 people participated in the second campaign, contributing 19,326 kilograms (42,607 lb). The foreign-debt-repayment campaign led by MBC and consumer and civic groups ran from January 12 to March 14. It had 884,000 participants, and collected 49,603 kilograms (109,356 lb).[8]

The gold-collecting campaign was most active in January, with participation slowing in February.[9] The Ministry of Commerce, Industry and Energy estimated the total number of participants at 3.51 million, with 30 percent of the gold collected during the campaign's first 10 days.[9] Participation continued during February, and MBC and the National Agricultural Cooperative Federation led their campaign until March 14. Although the foreign-debt-repayment was extended until April 30, participation decreased significantly after March 14.[9]

Campaign participants were expected to receive a confirmation letter from a professional appraiser for 24-karat gold. After export, its dollar value was determined at the exchange rate and the international gold price and the value later returned in won.[10]

About 225 tons were raised: 165t in January 1998, 53t in February, 5t in March, and 0.8t in April.[11] An equivalent of $2.17 billion was collected, increasing the amount of gold held by the Bank of Korea by 10 to 20 times.[11]

The press disseminated news about the gold-collecting campaign to all social groups, encouraging them to participate. After March, news reports indicated that the campaign hoped to overcome the foreign-exchange crisis and encouraged conformity.[11] The media reported on the participation of companies such as Samsung and Daewoo and individuals such as Lee Jong-bum, President Kim Dae-jung and Lee Kun-hee. They also encouraged participation in the campaign by the general public; Chung Sung-hwan donated the equivalent of ₩500,000.[12]

After March 1998, when the campaign was completed, its performance was reported. The report noted the fact that country could overcome its economic crisis primarily by collecting gold.[13] The campaign emphasized voluntarism and patriotism, and was developed for convenient participation.[14]

At the end of February 1998 five financial institutions (including the Housing Bank and Kookmin Bank) stopped collecting gold, and the NACF ceased its involvement at the end of April.[15] The amount of gold totaled about $1.82 billion in foreign currency.[16] An average of 65 grams (2.3 oz) per household was collected.[15] Twenty-one thousand people contributed 177 kilograms (390 lb) of gold, and 1,735 people consigned 131 kilograms (289 lb) in the form of government bonds.[16] The Housing Bank (KBS-Daewoo) collected the most gold (364t), followed by Nonghyup (MBC-Samsung, 48.23t), Kookmin Bank and Saemaeul Bank (SBS-LG, 33.68t), Korea Exchange Bank (4.25t) and Industrial Bank of Korea (1.98t).[16] The campaign repaid the $19.5 billion in IMF-backed debt in August 2001, three years ahead of schedule.[17]

The gold-collecting campaign is regarded as a driving force for a people to overcome a foreign-exchange crisis.[18] According to a 2017 survey conducted by the Korea Development Institute to assess the impact of the 1997 financial crisis, 54.4 percent of respondents cited national unity as the driving force behind recovery; 42.4 percent noted the IMF crisis, and 15.2 percent cited restructuring and reform efforts.[18]

Contemporary news articles emphasized voluntary participation to overcome a national crisis and shame associated with not self-sacrificing for the country.[19] Emphasizing the patriotism of the Korean people, it blurred the real reasons for the economic crisis with emotional appeals.[19] After the campaign ended, restructuring became an issue.[19] The collective memory of the campaign was used to justify chaebols, labor flexibility, over-consumption, and nostalgia for the Park Chung-hee regime; critical reflection on the event was ignored.[19]

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  The gold-collecting campaign
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  Korean citizens turning in gold
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  Video of the campaign: Gold-collecting campaign in South Korea to overcome the debt to the IMF.
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  Repayment to IMF, two years early (English Translation about the text on the screen: "Dedicated participation of the people who impressed the world")