Kim KiHan -Steering Committee Member, Global Call to Action Against Poverty Korea (GCAP Korea), Director of Economic Policy Team, Citizen’s Coalition for Economic Justice (CCEJ), 110-809, 26-9, Dongsung 3-gil, Jongno-gu, Seoul, Republic of Korea; E-mail: hyjo@ccej.or.kr

Abstract

The presented paper analyses inequality trends in Korea, its causes and its impact on the country’s economic development. The paper concludes with the recommendations on tackling inequality in South Korea.

South Korea faces inequality and an ever widening gap between the rich and the poor with harmful social consequences as a result of the rapid introduction of a neo-liberal economic model since the IMF financial crisis in 1997. Decreasing employment opportunities, declining quality of work, and widening income gaps have become more visible.

The main causes of inequality growth are an increasing number of temporary employment contracts, aging population, and insufficiently effective income distribution system. As a result the gap between the rich and the poor, the major companies and small business has widened. Over the last few years the Korean government has implemented policies aimed at intensive economic growth to the benefit of major corporations. It has not been sufficiently focused on social protection of the vulnerable social groups.

In the author’s opinion Korea needs “economic democracy” that guarantees a fair and equitable market economy and competition.

To reduce inequality the government should reform the tax system, abolish discrimination of temporary workers, implement effective social policy to improve the quality of life of its citizens; introduce necessary changes to the legislation and encourage NGOs to participate in programmes aimed at reducing inequality.