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South Korea's economic reforms a recipe for unhappiness South Korea's sadness should serve as a warning to European countries that are embarking on major cuts to welfare

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Ha-Joon Chang guardian.co.uk, Sunday 1 April 2012 20.30 BST

Britain's deputy prime minister, Nick Clegg, with Samsung Tesco CEO Lee Seung-han, tries out a virtual store at a subway station in Seoul. Photograph: Bobby Yip/Reuters My native South Korea is quite a star performer. With per capita income of around $20,000 (level with Portugal), it is not one of the richest countries, but we are talking about a country whose income was less than half that of Ghana's until the early 1960s. With an annual per capita income growth rate of just under 4%, it is one of the fastest-growing OECD economies. (1) Once associated with exploited sweatshop labour, churning out cheap transistor radios and trainers, the country now possesses the only thing that stands between the iPhone and world domination (the Samsung Galaxy). It is also a world leader in industries such as shipbuilding, steel and automobiles. (2) The country is, per capita, the third most innovative in the world, after Japan and Taiwan, when measured by the number of patents awarded by the US patent office. It has one of the world's highest university attendance rates, and schoolchildren who rank in the top five in nearly all standardised international tests. (3) So, when things seem to be going so swimmingly, why are Koreans clamouring for big changes before the general election next week? Because they are desperately unhappy. (4) According to a recent World Values Survey, Koreans are the second unhappiest people (after Hungary) among the citizens of the 32 OECD countries studied. Worse, its children are the unhappiest in the rich world, according to a survey of 23 OECD countries done by Yonsei University in Seoul. In 2009 the country topped the international league table for suicides, with 28.4 suicides per 100,000 people. Japan was a distant second with 19.7. But Koreans never used to be this unhappy. Until 1995 its suicide rate was, at about 10 per 100,000 people, just below the OECD average. Since then it has almost tripled. (5)

The answer to the Korean puzzle can be found in the economic reform implemented after the country's 1997 financial crisis. Similar to the UK-US, the stock market was fully opened to foreign investors, putting the larger, stock-market listed companies under pressure from international shareholders, making them increase short-term profits by minimising investments. The ability of smaller companies to invest was greatly reduced due to a lack of credit availability. Less regulation allowed banks to rush into more lucrative consumer loan markets, reducing the amount of loans to business. (6) The resulting fall in investments has led to a substantial fall in economic growth from 6%-7% (in per capita terms) per year to under 4%. With lower growth, few well-paid jobs are created. When combined with the relaxation of labour laws after 1997, this has given employers an upper hand over their workers. Many employees were sacked and re-hired as "agency" workers, doing the same jobs at lower wages. The proportion of the workforce without a permanent contract rose from an already high 50% to 60%, the highest in the OECD. (7) Not that having a permanent contract gives you much protection these days. Most of the companies that used to provide "lifetime employment" for their workers have ended the practice, with older staff put under pressure to make way for younger, cheaper workers. (8) And all of this is going on in the absence of a decent welfare state the country has the second smallest in the OECD, after Mexico (measured by welfare spending as a share of GDP). Given this, people live in constant fear of unemployment, forced retirement, and major illnesses, which expose them to a life of extreme poverty. (9) This "fear factor" also partly explains the country's excessive educational zeal. Pupils study hard, thinking that better educational qualification may give them protection in an unforgiving labour market. But since everyone is studying hard, they have to run faster to stay in the same place. The result is the combination of long study hours (double that of Finnish children, who do equally well in international tests), and enormous mental stress. (10) Moreover, increased job insecurity has driven the best Korean students into "secure" professions, like medicine and law, leaving science and engineering deprived of top talents. If this trend continues, the country's ability to innovate will be damaged. (11) The sad tale of my country should serve as a salutary warning to Britain and other European countries that are embarking on major cuts to welfare. They believe that such cuts will reduce budget deficits and make their economies more productive by making people compete more vigorously. However, the Korean story shows that insecurity actually makes people less, not more, productive, and also desperately unhappy. Surely, that is not what they want. (12)

Key Words Fill the gaps in the sentences using these key words from the text. The paragraph numbers are given to help you.
star performer salutary exploited sweatshop lucrative upper hand deprived churn out sacked innovative insecurity going swimmingly clamour zeal vigorously

1. You have the ____________________ if you have an advantage over someone else; if you are above them in terms of power or intelligence. (para 7) 2. A _______________________ is a factory with awful working conditions for its workers; it produces goods extremely cheaply, and workers sweat a lot. (para 2) 3. When things are __________________________________________ everything is going well in your life. (para 4) 4. To ________________________ means a loud persistent outcry, as from a large number of people. (para 4) 5. To ______________________________ means to produce something at a fast rate, and usually mechanically. Example: JYP really _____________________ pop-stars in his entertainment company. (para 2) 6. _________________________ means doing something with a lot of energy or force; often enthusiastically. (para 10) 7. When you dont feel safe or confident you are experiencing __________________________. (para 11) 8. When something is _____________________________, it means that it earns a lot of money for the company or person who is doing it. (para 6) 9. _______________________ (in the case of people) means they are taken advantage of or used by others. (para 2) 10. You are __________________________ if you are forward thinking; if you show new ideas, methods etc. (para 3) 11. To be ________________________ means the same as to be fired; to lose ones job. (para 7) 12. You are a ___________________________________ if you are the best player in a team; a top individual in a group. (para 1) 13. A _____________________________ piece of advice is advice intended to improve your situation in some respect; perhaps in health. (para 12) 14. _____________________ means having a feeling of strong eagerness (usually in favor of a person or cause). (para 10) 15. If you are ______________________ of something it means you are lacking in it. (It usually means healthful environment, money etc.) Most high school students in Korea are ___________________ of sleep. (para 11)

Find the information Look in the text and find this information as quickly as possible. 1. 2. 3. 4. 5. The annual growth rate in GDP in Korea. (para 1) _____________________________ Korea is the ________-most innovative country in the world. (para 3) Growth has fallen from 6-7% per annum to ______ . (para 7) Korea has the second smallest ___________________ after Mexico. (para 9) The fear factor means that Korean students study __________ as many hours as Finnish students. (para 10)

Comprehension Check Are these statements true (T) or false (F) according to the text? 1. South Koreas per capita income used to be half that of Portugals. 2. South Korea used to be associated with cheap, sweatshop products but is now linked with high-tech electronic devices such as mobile phones. 3. According to a World Values Survey Korea is the least happy nation in the world. 4. The fear factor can partly explain the excessive educational zeal according to the author. 5. Korea is now deprived of people entering the professions of law and medicine. 6. The author believes that budget cuts will ultimately make people happier. 7. Koreans have always been unhappy according to the author. Find the word Find the following words and phrases in the text. 1. A nine letter word that means the same as per person or per head. (para 1) _________________ 2. A 7-letter verb; similar meaning as have. (para 2) _________________
3. A 10-letter noun meaning exercise of control or influence over someone or something, or the state of being so controlled. (para 2) ________________________ 4. A 6-letter noun meaning roughly the same as money. If you are in ______________ you have more money than you need. (para 6) _______________ 5. An 11-letter word meaning of considerable importance, size, or worth. Like great. (para 7) ___________________________ 6. Same spelling as a kind of flower but here it is the past tense of the verb rise. (para 8) ________________________ 7. A two-word phrase meaning a system in which the government promises to protect the health and well-being of its citizens, esp. those in financial or social need. (para 9) ________________________ 8. An 11-letter adjective meaning harsh/ hostile; also meaning not willing to forgive or excuse people's faults or wrongdoings. (para 10) ____________________________ 9. An adjective meaning producing or able to produce large amounts of goods, crops, or other commodities. (para 12) _________________________________ Discussion 1. What do you think about the article? 2. The author says that if the UK made cuts to the welfare state it would lead to people becoming less happy. Whats your opinion? 3. Whats the cause of the high rate of suicide in Korea, in your opinion?

Group Work The article mentions the education system a number of times in the article. Your group has been promoted to the Education Ministry- your job is to reform the education system in Korea. Use this page to make your plan of action. You can use: First, Second, Then, After that, Finally This would/ should.. / We-Schools ought to/ should

Plan Students in groups brainstorm and share the uses of newspapers. Hand a pic to each group and have them share with class and try to predict what the story will be about. Cut up article into sections A, B, C, D- individual students are given one section to read and paraphrase themselves. Sit with other A, B, C, D students and make the meaning of their section clear. Feedback with entire class section by section. Move back into regular groups. Hand out article. First students work on KEY WORDS section. Check answers. Find information, Comprehension check, find the word and finally discussion. Groups work on proposals for changes to education system.

Word Building Adjective 1. Match words on each column to make collocations Suicide Bananas Commit Go Reduce Embark on A major study Swimmingly Debt Inequality A road- trip Noun

A
My native South Korea is quite a star performer. With per capita income of around $20,000 (level with Portugal), it is not one of the richest countries, but we are talking about a country whose income was less than half that of Ghana's until the early 1960s. With an annual per capita income growth rate of just under 4%, it is one of the fastest-growing OECD economies. Once associated with exploited sweatshop labour, churning out cheap transistor radios and trainers, the country now possesses the only thing that stands between the iPhone and world domination (the Samsung Galaxy). It is also a world leader in industries such as shipbuilding, steel and automobiles. The country is, per capita, the third most innovative in the world, after Japan and Taiwan, when measured by the number of patents awarded by the US patent office. It has one of the world's highest university attendance rates, and schoolchildren who rank in the top five in nearly all standardised international tests.

B
So, when things seem to be going so swimmingly, why are Koreans clamouring for big changes before the general election next week? Because they are desperately unhappy. According to a recent World Values Survey, Koreans are the second unhappiest people (after Hungary) among the citizens of the 32 OECD countries studied. Worse, its children are the unhappiest in the rich world, according to a survey of 23 OECD countries done by Yonsei University in Seoul. In 2009 the country topped the international league table for suicides, with 28.4 suicides per 100,000 people. Japan was a distant second with 19.7. But Koreans never used to be this unhappy. Until 1995 its suicide rate was, at about 10 per 100,000 people, just below the OECD average. Since then it has almost tripled. The answer to the Korean puzzle can be found in the economic reform implemented after the country's 1997 financial crisis. Similar to the UK-US, the stock market was fully opened to foreign investors, putting the larger, stock-market listed companies under pressure from international shareholders, making them increase short-term profits by minimising investments. The ability of smaller companies to invest was greatly reduced due to a lack of credit availability. Less regulation allowed banks to rush into more lucrative consumer loan markets, reducing the amount of loans to business.

C
The resulting fall in investments has led to a substantial fall in economic growth from 6%-7% (in per capita terms) per year to under 4%. With lower growth, few well-paid jobs are created. When combined with the relaxation of labour laws after 1997, this has given employers an upper hand over their workers. Many employees were sacked and re-hired as "agency" workers, doing the same jobs at lower wages. The proportion of the workforce without a permanent contract rose from an already high 50% to 60%, the highest in the OECD. Not that having a permanent contract gives you much protection these days. Most of the companies that used to provide "lifetime employment" for their workers have ended the practice, with older staff put under pressure to make way for younger, cheaper workers. And all of this is going on in the absence of a decent welfare state the country has the second smallest in the OECD, after Mexico (measured by welfare spending as a share of GDP). Given this, people live in constant fear of unemployment, forced retirement, and major illnesses, which expose them to a life of extreme poverty.

D
This "fear factor" also partly explains the country's excessive educational zeal. Pupils study hard, thinking that better educational qualification may give them protection in an unforgiving labour market. But since everyone is studying hard, they have to run faster to stay in the same place. The result is the combination of long study hours (double that of Finnish children, who do equally well in international tests), and enormous mental stress. Moreover, increased job insecurity has driven the best Korean students into "secure" professions, like medicine and law, leaving science and engineering deprived of top talents. If this trend continues, the country's ability to innovate will be damaged. The sad tale of my country should serve as a salutary warning to Britain and other European countries that are embarking on major cuts to welfare. They believe that such cuts will reduce budget deficits and make their economies more productive by making people compete more vigorously. However, the Korean story shows that insecurity actually makes people less, not more, productive, and also desperately

unhappy. Surely, that is not what they want.