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Setting the Scene: How Did The Asian Financial Crisis Shape Contemporary South Korean Horror?18 min read

28 October 2020 12 min read


Setting the Scene: How Did The Asian Financial Crisis Shape Contemporary South Korean Horror?18 min read

Reading Time: 12 minutes

‘Setting The Scene’ is a column where we examine how a country’s culture, economy, history and politics have all come together to shape its hit films, and what they may reveal about the subconsciousness of its people.

While the glitz and glamour of K-pop and K-drama may suggest otherwise, South Korea has been shaped by a calamitous history marked by foreign exploitations, familial separations and societal crises. Two cataclysmic events have come to define South Korea: the Korean War and the Asian Financial Crisis (AFC). The pain and terror from these collective experiences have not only contributed to South Korean cinema’s apt handling of social realist films but also their unique expressions in horror films.

It seems no coincidence that the popularity of contemporary Korean horror – both domestically and internationally – can be traced to 1998 while the country was still suffering from its worst financial crisis. Since then, Korean horror has shocked the world with its gruesome imagery, thrilled with its handling of the zombie sub-genre, and terrified with its unapologetic themes of brutal extremes.

(Film still of ‘A Tale of Two Sisters’ / Image credit: B.O.M. Film Productions Co.)

In the previous edition of this two-part series, we took a look at the horror hits of Thailand as responses to the AFC, looking to explain their popularity and quality by how they allow the Thai public to work through the trauma of an economic nightmare. This time around, we set out to do the same with Korean horror.

Contemporary Korean horror, however, has to be seen as more than a direct product of the Asian Financial Crisis.

A very, very abridged account of 20th-century Korean history

Throughout most of its history, Korea has had to navigate through the ever-looming threat of foreign invasions, and the overwhelming diplomatic and cultural influence of its powerful neighbours. As a people, its suffering has almost always been at the whims of foreign powers. In the 20th century alone, the country saw itself switch from being a tributary state to Chinese dynasties to being occupied by the Japanese, before being split in half by Western powers in the aftermath of WW2.

While the division post-WW2 was intended to be temporary, Korea soon became the first heated site of proxy conflicts between the two Cold War superpowers. The Korean war would be the deadliest conflict of the Cold War, with a larger proportional civilian death toll than WW2 or the Vietnam War. The war saw cities destroyed with millions of Korean families displaced and separated.

South Korea emerged from the war as one of the world’s poorest states, with poverty further compounded with how the North held most of the fertile lands. Still, the country would see enormous financial growth over the next three decades due to a multitude of factors, including rapid industrialisation, a nationalised financial system centring on chaebols, and the country’s close economic ties with the US and Japan.

Side by side massive political shifts, South Korea would continue to see incredulous economic growth throughout the latter half of the 20th century, eventually being dubbed as one of the Four Asian Tiger economies. However, the spectacular growth of the South Korean economy would come to a screeching halt with the 1997 AFC.

The AFC and South Korea

I very briefly went through the background of the AFC in the previous edition of this series, pinpointing neoliberalism and weak governmental institutions as key reasons for the crisis. While there are inevitable differences, similarities in the responses by both Korean horror and Thai horror can still be found, particularly with a need for nostalgia.

A key reason for the “Miracle on the Han River” has been South Korea’s adoption of economic nationalism, which sought to minimise foreign imports to protect its own industries. By the late 1980s and early 1990s, neoliberalism came knocking and South Korea liberalised its financial market (not entirely against its own volition), bringing in considerable foreign capital into the Korean stock market. 

The close relationship between chaebols and the government remained a key constant throughout the country’s shift from autocracy to democracy. However, the disastrous consequences of such a relationship would be exposed once neoliberalism forced the country to remove restrictions on foreign participation in the manufacturing and banking sectors.

Low-interest rates loans from state-controlled banks fuelled the growth of chaebols. Encouraged by the tremendous and steady growth of the Korean economy, companies took massive loans, bubbling into equally massive debts.

Due to deep interlinks between economies, what started out as a crisis in Southeast Asia spread to the geographical edge of East Asia. Speculative attacks sparked rapid foreign capital flight. Domestic banks which borrowed in US dollars now had to repay at higher interest rates with a weak national currency. Companies, even large chaebols, turned belly up being unable to repay loans. The unemployment rate soared to 7 per cent. 

(A South Korean worker part of a protest in 1997 against the IMF/ Photo credit: Associated Press)

Regarded as the country’s biggest disaster since the Korean War, the AFC was cataclysmic for South Korean society. The International Monetary Fund’s $58 billion bailout package required significant economic policy allowing for even greater foreign participation in local businesses, spending cuts on governmental programmes, and labour market reforms that would break the generation-long commitment of lifelong employment promised by companies. 

The damage caused by these terms has led the AFC to be better known as the IMF Crisis in South Korea. While the country would defy expectations and economically recover in just two years, this recovery would not include every part of society, with millions still in poverty today due to the crisis. The aftershocks of the AFC would resonate throughout South Korea with how it lays the groundwork for the country’s immense economic inequalities today, and its notoriety as an individualistic, ever-competitive society.

The Birth of Contemporary Korean Horror Cinema

South Korean cinema was marred by tight censorship policies while it was under autocratic rule. However, its transition to democracy in 1987 would revitalise the film industry, with such a deep level of support that there were concerted government efforts to invest in local talents even amidst the AFC. A direct consequence of the AFC was with chaebols withdrawing from their endeavours in the industry, which presented opportunities for young directors to take centre stage. 

One of the standout films the came with this shift is Whispering Corridors. The directorial debut of Park Ki-Hyung was South Korea’s third highest-grossing domestic film in 1998. The success of the highly-influential horror classic has been credited as kickstarting Korean cinema’s foray into the genre.

Similar to Thailand, nationalistic sentiments emerged in South Korea post-crisis. For them, the IMF crisis was yet another painful example of foreign exploitation. The immense national pride that emerged led to the South Korean people’s mass donation of gold from households across the country, which eventually amounted to repay billions of national debt.

Whispering Corridors’s box-office success is partially due to these sentiments manifesting into campaigns such as the “Boycott Hollywood film” movement, with domestic audiences favouring locally-produced films.

Another explanation of the horror classic’s success could come with how it represented where South Koreans’ nostalgia for a better past has led them: the dream of reunification. The scars of familial separation left by the Korean War was still fresh; Korea was ‘whole’ only a century ago. The sentiment was that only together, against the barrage of centuries of foreign influence, can Korea emerge stronger. 

In the retelling of the trauma of both the AFC and the Korean War, Korean horror films, such as Whispering Corridors and A Tale of Two Sisters, often use two female siblings or close friends as leads: “two” for representing the North and South, and “women” for how they were the worst hit by both the Korean War and the AFC. 

(‘Whispering Corridors’ would spin off into a series with four more films / Image credit: Cine2000 Film Production)

Women being portrayed as victims is a common thread among war-related media throughout the world. Meanwhile, similar to Thailand, women were the first to be retrenched from the AFC despite young girls from rural areas making up the majority of light manufacturing labour in South Korea’s early years and women subjected to practically all of the inequalities synonymous with a patriarchal society. All this is compounded by the general sentiment within Korean culture that a women’s vengeance is something to be feared, making feminine depictions of the supernatural a natural short-hand.

Set in an all-girls high school haunted by a vengeful spirit, Whispering Corridors critiques the country’s history with censorship while allowing audiences the opportunity to work through trauma. Mr Oh, a cruel and abusive teacher, serves as stand-ins for both South Korea’s autocratic past and the evil outsider splitting kinships.  

The academically competitive environment, added on by the context of a lack of opportunities caused by the financial crisis, brings emotional emphasis to the friendships presented. It is revealed that Eun-young, an ex-student and now a teacher at the school, returned to investigate the death of her best friend Jin-ji, who now haunts its dark hallways. Similarly, it is also revealed that two of the main leads, the class star student So-young and the unpopular Jung-sook, were close friends who drifted apart due to teachers comparing their academic abilities.

(Film still of ‘Whispering Corridors’ / Image credit: Cine2000 Film Production)

Both of these friendships were separated by larger powers beyond their control, much like how Korea was divided into North and South, and how foreign strongarming led to financial disaster. Common with the trope and present in Whispering Corridors is with these best friends or siblings often having contrasting personalities – this, again, parallels the two Koreas. 

How Whispering Corridors serves as catharsis can be seen with the murderous ghost herself. The spirit does not represent trauma as much as she is an avatar of vengeance, returning to the school to exact brutal revenge on its abusive teachers. The gruesome death of Mr Oh can be seen as symbolically toppling oppression.  

By appealing to South Koreans’ want for reunification and vengeance against centuries of foreign exploitation, it seems no surprise why themes of revenge are a common theme present in both its horror films and action-thrillers. 

Korean Zombie Films and Pandemic-related Horror

While the domestic and international success of Korean zombie films can be attributed to the worldwide popularity of the genre, why the subgenre became a staple of Korean horror and how the Koreans are able to execute them so engagingly well can be explained, again, by their history and social issues.

South Koreans have deep-seated trauma about the virality of diseases; not because of experiences with world-ending plagues but with the AFC. The crisis demonstrated this with its spread from Southeast Asia, and with how the damage from loans by the government and chaebols trickled down unmercifully to the masses.

A key theme in Korean zombie and pandemic-related horror is with how the poor and marginalised are often left to fend for themselves, while the rich are usually able to escape from the sufferings. This is similar to what happened to South Korean society post-AFC. 

(The poor are quarantined by the authorities in ‘The Host’ / Image credit: Showbox Entertainment) 

In their bailout package, IMF forced austerity measures which meant cuts for governmental programmes and higher taxes. Reforms in the labour market meant that the commitment of lifelong-employment made by companies to employees (prevalent in corporate culture in both Korea and Japan) could no longer apply. 

While some chaebols did eventually collapse even despite the government’s efforts, those that survived the crisis, now with less competition, have grown monstrously large. Meanwhile, the fringes of society, forced into poverty by the AFC, still lack effective governmental support and help today. 

These have led to massive social and economic inequality in the country, further precipitated by the 2008 Global Financial Crisis (GFC) (which, again, brought front and centre the virality, horrifying speed of spread, and tremendous damage of economic crises).

Pandemic-related horror films have plainly reflected these pains. In The Host, the monster was created by a foreign scientist’s nonchalance, with the government’s first response being quarantining and separating the poor from the rest of the population. Adding on to our previous analysis of Netflix series Kingdom, it seems unsurprising that the disease started right with the kingdom’s monarch. These have all been plot points that have resonated with South Korean society.

(Still of ‘Train to Busan’ / Image credit: Next Entertainment World)

Korean zombie films undoubtedly made its international mark with the smash-hit Train to Busan. Domestically, the action-packed zombie flick saw the highest single-day box office sales in Korean film history. More than just an excellent entry to the genre, Train To Busan is also an amalgamation of the key themes present in Korean horror – social commentary, a force of nature or supernatural beings killing the oppressors, and even two sisters separated by forces beyond the control. 

The train’s passengers coming from all walks of life embody modern Korean society. The zombies are seen more as a force of nature, with a COO being the film’s main antagonist. Instead of helping the passengers towards safe passage, the train’s crew is directed by the COO to ensure his safety. The working class and youths face the brunt of the damage. The homeless character has PTSD from a viral outbreak. The list goes on; Train to Busan makes its social critiques clear.

While Seoul Station, the well-received animated prequel of Train to Busan, would follow on this same note, the 2020 sequel Peninsula would almost completely divorce itself from its social consciousness. Although the film was still a box office success especially amidst a global pandemic, Peninsula’s sole focus on being a post-apocalyptic action-thriller was not well-received by audiences. 

The difference in reception between Train to Busan and Peninsula could be evidence that zombies and pandemic-related themes cannot appeal and function on their own without relatability and the ability to be thoughtful catharsis. 

If the quality and popularity of Korean zombie films are indeed a product of post-AFC trauma, the implications of this may be fascinating. While the causes are often due to human negligence or greed, zombies and plagues are still inherently forces of nature, like floods or droughts. Imagining financial crises as these forces feel like a resignation that these crises are natural, inevitable and even necessary. 

After all, the causes of financial crises and the environment that perpetuates them are also the same reasons why South Korea transformed from a poverty-struck, primarily agrarian country to an economic powerhouse in less than a generation. There seems to be an unconscious recognition that the miraculous growth isn’t without consequences. 

The main response from Korean horror of this inevitability is by ending their films with a reminder of the importance of the family unit and the remembrance of better times. This can definitely be seen from Train to Busan and The Wailing, another critically-acclaimed horror hit from 2016.  

South Korean Horror as a Reflection of Its People’s Subconsciousness

Generations of foreign exploitation and cultural influence, with the AFC being the latest calamity, could definitely be a short-hand answer for why Korean films, in general, are often revenge-themed and macabre in its details. This analysis looked at just one additional layer below, examining the subconscious through the other prominent, ever-present themes in South Korean horror.

Blockbusters (and television series) about the North and South are almost always sure-fire successes in South Korea. Most recently, Steel Rain 2, an action thriller about a peace summit between the two Koreas gone wrong, was the film that eventually toppled Peninsula in the box office. Even the mega-success of Crash Landing on You can, rather bluntly, speak of the ‘taboo’ appeal of their neighbours up north.

(Film still of ‘A Tale of Two Sisters’ / Image credit: B.O.M. Film Productions Co.)

Centuries of foreign cultural influence has led South Koreans to search for a solid identity – even today, ethnic Koreans are still discriminated in Japan, and with both Japan and China each claiming that the Koreans are their descendants. Thus, the dream of reunification is not just of families reuniting. In a larger sense, reunification is seen as a key for Koreans to solidify their identity in a hostile world.

Action thrillers, political dramas and even sappy romance dramas have all expressed this subconscious in their own ways. Korean horror looks to allow South Koreans to work through past traumas by appealing to the dream of reunification, with a healthy dose of vengeance dealt towards stand-ins of foreign powers and of Korea’s autocratic past. 

In part due to the worldwide popularity of zombie-themed media, films of the sub-genre saw massive success both domestically and internationally. Their domestic success could be explained by how they parallel the painful legacy of the AFC through their social commentaries, the virality of zombie plagues, and the acceptance of financial crises as ‘forces of nature’.

Concluding the Two-Part Series

Both Thai and Korean horror films, having emerged in the post-AFC years, can be seen as restaging the societal trauma of the crisis, each differing in their responses based on their history, culture, and political climate. This difference has continued to be their defining characteristics, although horror films in recent years from both countries have both, in their own ways, acknowledged the inevitability of financial crises and have settled on nostalgia, mainly of the past stability of the family unit, as concluding responses.

(Film still of ‘The Wailing’ / Image credit: 20th Century Fox Korea)

Surprisingly, picking out the trends of each horror cinema was not a difficult endeavour – this may be exactly why the genre has remained popular domestically. These familiar beats are able to condense trauma before dissipating them as a cathartic release from the safe distance of a projector screen. Their use of the supernatural to parallel societal suffering is coded enough to serve as an escape from realities, while, at the same time, is not too coded for the messaging and its catharsis to be lost. 

This required filmmaking finesse, which backed by supportive film policies, has definitely translated into the two cinemas’ international acclaim and popularity, with their horror films celebrated for their technical prowess and proficiency at enabling sleepless nights.

Perhaps more so than that, it is exactly their uniqueness, carved by their society’s response to the AFC,  that etches them a permanent spot on the tapestry of world cinema.

Read more:
Setting the Scene: How Did The Asian Financial Crisis Shape Contemporary Thai Horror?
Film Review: ‘Videophobia’ Is a Mind-Bending Trip Through a Fractured Psyche
Lurking in the Shadows of the Asian Psyche – What Makes Asian Horror So Terrifying?

The fourth and final round of The Inciting Incident: Sinema Screenplay Challenge is now open, with only ONE WEEK LEFT to submit your entries. For full details and submission of entries, visit the competition’s webpage at

Banner Image Credit: Still of ‘Train to Busan’  via Next Entertainment World)

There's nothing Matt loves more than "so bad, they're good" movies. Except browsing through crates of vinyl records. And Mexican food.
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