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What Are 재벌 (Chaebols) In Korea?

안녕하세요~. It's Vaibhavi from India. I am quite thrilled about this lesson because it took a lot of research, so let's get started right now. The word 재벌 translates to "money faction" or "wealth clan," but a 재벌 is more than a company. In South Korean culture, 재벌 are more like dynasties.


For instance, picture the dashing male leads in k-drama from rich families that capture all the women’s heart.



Introduction


재벌 are a significant part of South Korea's economy and society. These are large, family-owned conglomerates that play a crucial role in the country's economic growth and development. In this blog post, we will explore what 재벌 are, their history, their impact on the Korean economy, and the controversies surrounding them.


A Native Korean told me that there was a joke in South Korea back in the 1990s. It went like this:


What would employees of the mighty Korean conglomerates -- the so-called 재벌 -- do if they were accidentally confronted by a fearsome bear while strolling through the forest?


Hyundai employees would club the bear to death without hesitation. Daewoo would call its Chairman Kim Woo-jung and await his command. Samsung would hold a meeting -- with the bear still in front of them -- to discuss how to proceed. LG would wait for Samsung's response, and then do the same.


History of 재벌


재벌 emerged in the late 1960s and early 1970s when the South Korean government began to promote export-oriented industrialization. The government provided subsidies and loans to a few large conglomerates, giving them a significant competitive advantage over smaller firms. These conglomerates, including Samsung, Hyundai, and LG, grew rapidly and diversified into various sectors such as electronics, construction, and heavy industry.


During the 1980s and 1990s, chaebols played a central role in Korea's economic growth, making the country one of the world's leading exporters of electronics, automobiles, and steel. However, these conglomerates' power and influence soon became a cause for concern, leading to several controversies and debates.


Some of the biggest 재벌 in Korea include Samsung, Hyundai, LG, SK Group, and Lotte Group.


Some Korean celebrities who come from 재벌 families include:


  • Jennie Kim from the girl group BLACKPINK: Jennie’s mother is reportedly a shareholder and significant stakeholder in CJ E&M, one of South Korea’s most prominent entertainment content companies and the parent company of MNet and TVN in South Korea. Her father is reportedly the owner of a hospital in the district of Gangnam in Seoul.

  • Super Junior’s Siwon : Siwon’s father was reportedly the former CEO of Boryung Medicine, a well-known pharmaceutical company in Korea. His family also apparently owns the Hyundai Department Store, one of the major department store chains in Korea, and Korean Slim Fashion.

  • ENHYPEN's JAY : Jay’s father is a co-owner and reportedly the President of Sinar Tours. This travel agency started chartering flights from South Korea to Brunei since there were no direct flights to and from these destinations in 2015.

  • Yoon Kyun-sang, an actor whose father is the CEO of a South Korean trading company.

  • Im Si-wan, an actor and member of the boy group ZE:A, whose grandfather was the founder of a South Korean textile company.

  • TWICE’s Tzuyu : Tzuyu’s parents were self-made entrepreneurs in Taiwan. They managed a night market business in Tainan city and invested in three hospitals. Tzuyu’s mother also managed medical aesthetic clinics and cafes.


It's worth noting that while these celebrities come from 재벌 families, they often downplay or even hide their family backgrounds to avoid criticism or accusations of nepotism.


Impact on the Korean Economy


재벌 are a significant contributor to the Korean economy, accounting for around 80% of the country's gross domestic product (GDP). They provide employment to a large number of people and have helped in transforming the country's economy from an agrarian one to a modern, industrialized one.


However, the dominance of 재벌 has also led to several economic problems, such as a lack of competition, unequal distribution of wealth, and corruption. Many small and medium-sized enterprises have struggled to compete with 재벌, resulting in a lack of diversity in the Korean economy.


Controversies Surrounding Chaebols


재벌 have been embroiled in several controversies over the years, leading to calls for reform and regulation. One of the most significant controversies was the corruption scandal involving former President Park Geun-hye and the Samsung Group's heir, Lee Jae-yong. Lee was sentenced to five years in prison for bribery and embezzlement

.

Lee Jae Yong: Samsung heir gets prison term for bribery scandal

Another controversy is the lack of transparency and accountability of 재벌. Many of these conglomerates are family-owned, and their owners often exercise significant control over the company's operations, leading to allegations of nepotism and lack of accountability.


Conclusion


재벌 are a crucial part of South Korea's economy and society. While they have the country's economy and providing employment to a large number of people, they have also been the subject of several controversies. Calls for reform and regulation have grown louder in recent years, and it remains to be seen how 재벌 will evolve in the future.


I hope you learnt something new through this lesson. I'll see you in next lesson. Visit the website for more interesting lessons.



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