South Korea: The End of the Miracle

In Ulsan 10,000 riot police battled striking shipyard workers. In Seoul 2,400 police arrested union militants at the headquarters of KBS, the national broadcasting network. Workers at several other companies staged brief sympathy strikes. The latest outbreak of labor unrest was a stiff test of the government’s new resolve to deal forcefully with strikers to keep South Korea’s faltering economy out of trouble.

Officials and workers share a growing fear that the country’s vaunted economic miracle is ending. Exports are down from last year, imports are soaring, and inflation has already grown 4.7%. The once weak won has risen 31% against the dollar since 1986, while wages have soared 90%. Last week the stock market plunged to an 18-month low before rebounding slightly.