How Policy Is Building a Social Economy in South Korea

For context, the grassroots response to the 1997 economic crisis was extraordinary. For example, Korean citizens mobilized to donate 227 tons of their personal gold items (with an estimated total value of $3 billion) to help pay off the debt.¹ This citizen activism prompted government action to honor the sacrifice. Specifically, $90 million of the liquidated gold (about three percent of the total) was dedicated to a workers’ welfare fund, with part of the proceeds used to help create the “People’s Movement Committee for Overcoming Unemployment.”²

Self-sufficiency enterprises predated the crisis. As Lee Byung Hak, president of Central Self-Sufficiency Fund, explains, these small self-help enterprises, or makeshift cooperatives, were created before 1997 “to make ends meet in a communitarian way.” Often, groups of residents would come together to cooperatively seek and share work in sectors like construction and housecleaning or to market locally produced goods. By sharing opportunities and challenges, impoverished workers found ways to make ends meet. But these “self-sufficiency productive communities” struggled mightily for capital and adequate business opportunities, particularly as the economic crisis hit. Government support was required.

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