1998 IMF Gold Collection Campaign: Process and Results ====================================================== The 1998 gold collection campaign was a public effort to secure foreign currency using gold owned by citizens. It examines differences in reported participation across sources and how participants were paid, while treating IMF loan repayment separately from debates over responsibility for the crisis. - In 1997, South Korea's foreign currency shortage worsened as problems in its financial institutions and companies coincided with the withdrawal of foreign funds. - People took part in the 1998 gold collection campaign both by donating gold and by receiving payment for it. - Participation figures and the amount of gold collected vary even among public historical accounts, so sources and the scope of each count should be stated. - South Korea finished repaying the IMF loans it took out during the foreign exchange crisis on August 23, 2001. - The significance of public participation and the responsibility of the government and companies for the crisis should be assessed separately. In 1998, Koreans contributed gold to help secure foreign currency during the IMF foreign exchange crisis. International financial support and economic adjustments also helped resolve the crisis. This participation is remembered as a symbol of a collective response. This article is based on records from the National Archives of Korea and Our History Net. The information was checked in October 2026. Why was there a shortage of foreign currency in 1997? A foreign exchange crisis occurs when a country has difficulty obtaining the foreign currency it needs to make payments abroad on time. IMF is the name of an international organization, the International Monetary Fund. In Korea, the term is also used to refer to the economic crisis during which the country received support from that organization. The crisis was rooted partly in excessive corporate borrowing and problems at financial institutions. Financial institutions borrowed money from abroad for short periods and used it for long-term purposes. When repayment came due, they had to rely on new borrowing to keep going. A series of corporate bankruptcies in 1997 increased concerns about financial institutions. Financial instability in Asian countries, including Thailand, also prompted foreign investors to withdraw funds. Weaknesses at home and shocks in international financial markets combined. These multiple causes are described in Our History Net’s historical account. Element of the crisis Problem at the time Connection to the foreign currency shortage Corporate financial problems Debt-funded investment and a series of bankruptcies Deteriorating financial health of the institutions that had lent money Mismatch in repayment timing Borrowing short-term and using the funds long-term A shortage of foreign currency needed for immediate repayment Withdrawal of foreign funds Refusal to extend loans and withdrawal of investments Fewer ways to obtain new foreign currency Weak financial oversight Inadequate response to accumulating risks Reduced ability to absorb shocks How the foreign currency shortage affected jobs and daily life The difficulty of obtaining foreign currency led to funding problems for businesses and income insecurity for households. The initial crisis response included high interest rates and austerity measures. As borrowing costs rose, businesses’ finances worsened. Business closures and restructuring increased job losses. The social security system at the time struggled to cope with the sharp rise in unemployment. Even after the economy recovered, the losses households had suffered did not disappear at the same time. Timeline from the request for support to repayment The 1997 request for support, public participation in 1998 and repayment in 2001 were separate stages. The date negotiations concluded must also be distinguished from the date the loan arrangement was approved. The end of the support arrangement and final repayment of the borrowed funds were not the same event either. Date Event Source January 1997 Hanbo’s bankruptcy heightened concerns about corporate and financial-sector problems Our History Net, “The IMF Crisis” November 21, 1997 The government announced plans to request IMF support Our History Net, “The IMF Crisis” December 3, 1997 Negotiations between the Korean government and IMF concluded Our History Net, “The IMF Crisis” December 4, 1997 IMF Stand-By Arrangement approved IMF lending arrangements history January 5, 1998 KBS broadcast campaign began Our History Net, “The IMF Crisis” December 3, 2000 IMF Stand-By Arrangement period ended IMF lending arrangements history August 23, 2001 Final repayment of IMF borrowing related to the foreign exchange crisis IMF transaction records The arrangement period is recorded in the IMF lending arrangements history. The final repayment date can be verified in the IMF’s 2001 transaction records. How people took part in the 1998 gold collection campaign Individuals participated in response to appeals on television and through collection points at financial institutions. KBS worked with Housing Bank and a company responsible for exports. Other broadcasters and financial institutions also participated in the campaign. Participation and the process of securing foreign currency worked as follows. Individuals handed in gold they owned at collection points. The collected gold was appraised and pooled for export. The gold was sold abroad to secure foreign currency. Participants who chose to receive payment were paid the proceeds from the sale. Some participants received payment, while others handed over their gold without compensation. It would therefore be inaccurate to describe all the collected gold as donations. Reporting from 1998 also described an arrangement under which people who handed in gold received payment later. This can be verified in an article reporting on the campaign at the time. How much gold was collected, and why do the figures differ? Public historical accounts give different figures for the number of participants and the amount of gold collected. The figures below retain the wording used by each account. No basis was found for treating either set as a correction of the other. Item Our History Net, “The IMF Crisis” National Archives of Korea, “Overcoming the IMF Foreign Exchange Crisis” Participants More than 3.49 million About 3.51 million Gold collected About 225 tons 227 tons Amount in dollars $2.17 billion at market prices at the time Worth $1.8 billion Period described Began January 5, 1998; officially ended March 14 Three months in early 1998 The two accounts alone cannot establish the reason for the differences. The scope of participating institutions and the cutoff dates need to be compared. It is also necessary to check whether the dollar figures represent assessed value or actual export proceeds. Converting the value of the gold collected in 1998 into today’s gold prices would answer a different question. To describe how much foreign currency was secured at the time, the valuation basis used then should be retained. The National Archives of Korea’s figures appear in its historical account. Turning points in resolving the crisis and early repayment Inflows of foreign currency and adjustments to repayment obligations both helped resolve the crisis. IMF support supplied urgently needed foreign currency. Changes to repayment schedules agreed with foreign creditor banks reduced immediate repayment demands. The shift to a current account surplus in 1998 also helped improve the foreign currency situation. The current account is the difference between external receipts and payments from transactions in goods and services, among other things. A decline in imports caused by the economic downturn also contributed to the growing surplus. The surplus alone does not mean that people’s living conditions improved. An IMF research paper assesses debt maturity adjustments as a key factor in resolving the crisis. It also analyzes reforms in the financial and corporate sectors and capital inflows. This is why gold collection alone cannot explain the entire recovery. Korea completed repayment of its IMF borrowing on August 23, 2001. The amount actually drawn was about $19.5 billion when converted into dollars at the time. That differs from the approximately $21 billion agreed under the IMF support arrangement. The arrangement amount and the amount drawn are distinguished in the IMF’s 2001 announcement of repayment. Term Meaning Interpretation to avoid Support arrangement amount The amount made available subject to conditions That the full amount was actually borrowed Amount actually borrowed The amount actually drawn from the support funds That it was equal to all international support Assessed value of collected gold The monetary value assigned to the gold collected That it was an amount paid directly to the IMF Completion of IMF loan repayment Repayment of the funds borrowed from the IMF under that arrangement That all of Korea’s external debt disappeared What the request for cooperation shows, and the limits of the record A document requesting cooperation in the campaign is a record of an appeal for participation through an administrative body. The National Archives of Korea lists a document titled “Cooperation in Participating in the to Overcome the Foreign Exchange Crisis.” Its listed year of creation is 1997. Catalog item Listed information Record number DA0037205 Year created 1997 Document type General document Length 2 pages Access status Public The year of creation in the catalog should not be confused with the 1998 start date of the broadcast campaign. Nor can the title alone establish that participation was compulsory. The original document must be checked for the specific request and the date it was issued. The information checked for this article is limited to the National Archives of Korea’s detailed catalog entry. Records and interpretation The fact of participation, the causes of the crisis and the social meaning of participation call for separate judgments. Events confirmed by records should be distinguished from researchers’ assessments. Recognizing the public’s contribution is compatible with asking who was responsible for the crisis. Facts confirmed by records Gold collection was an effort to secure foreign currency. Broadcasters and financial institutions connected people to the campaign. Final repayment of the IMF borrowing took place after the campaign. Background commonly identified in research The accumulation of short-term external debt is widely cited in explanations of the crisis. Weaknesses in domestic financial and corporate structures are also examined. Views differ, however, on the relative weight given to those domestic weaknesses and to the rapid withdrawal of funds by foreign investors. The IMF research paper also notes differences of opinion about the causes. It is therefore difficult to present any one explanation as a consensus among historians as a whole. The appropriateness of the initial high-interest-rate and austerity policies is also debated. Criticism that responsibility was placed on the public The central criticism is that structural responsibility for the crisis was recast as a question of sacrifice by the public. Our History Net’s account also presents this view. Assessing participants’ intentions is separate from assessing the responsibilities of the government and businesses. A 2017 study by Cheon Hye-jeong analyzed how news reports remembered the campaign. It interprets that memory as having been used to criticize excessive consumption or argue for national unity. That is different from a finding based on a survey of every participant’s motives. The study’s scope and interpretation can be checked in its abstract. What this event means today This case shows why economic recovery must be distinguished from household recovery. Even when the foreign currency situation improves, the effects of job losses and reduced income may remain. That is why a single loan repayment date cannot mark the recovery of society as a whole. It also shows how the memory of collective participation is formed. The experience of participating at the time was later reinterpreted in news coverage. Separating the event’s results from how later generations remembered it makes it possible to ask more specific questions. What period and scope are covered by figures for the foreign currency actually secured? Which groups bore the costs of responding to the crisis? What responsibilities are left out of accounts that emphasize public participation? Frequently asked questions Did everyone who handed in gold donate it? Not everyone gave their gold without compensation. Some handed in gold and received payment later. The total amount collected and the amount donated should therefore not be treated as the same figure. Did the collected gold pay off all the IMF debt? There is no basis for saying so. Gold exports were one way of securing foreign currency. Repayment was also helped by improvements in the foreign currency situation after international financial support was provided. Does completion of repayment mean all external debt disappeared? The completion of repayment in 2001 concerns the IMF borrowing in question. It did not eliminate other external debts owed by the government, financial institutions and businesses. IMF borrowing must be distinguished from the country’s total external debt. Which figure should be cited for the number of participants? The figure should be cited together with the account it comes from. Mixing participant, weight and value figures from different accounts makes the basis for the figures unclear. A detailed comparison requires checking the original figures compiled by each institution at the time. FAQ Q. Does the term IMF itself mean an economic crisis? A. IMF is an abbreviation for the International Monetary Fund, an international organization. In Korea, it is also used to refer to the economic crisis that began in 1997. Q. Why did Korea face a shortage of foreign currency in 1997? A. Companies and financial institutions had weak financial structures, and overseas funds were withdrawn. Borrowing foreign currency for short terms and using it for long-term purposes increased the repayment burden. Q. How did public participation expand in 1998? A. Broadcasters publicized the campaign, and financial institutions collected the gold. Export companies also participated, helping turn gold held by individuals into foreign currency. Q. Were people paid when they turned in their gold? A. Some people received payment, while others handed over their gold for free. Describing all participation as unpaid donations misses how people actually took part. Q. How much gold was collected? A. Our History Net puts the amount collected in the 1998 campaign at about 225 tons. The National Archives of Korea records that 227 tons were collected during the first three months of the same year. The two accounts alone do not establish the difference in what each figure includes. Q. When did Korea fully repay its IMF loans? A. The final repayment date for the IMF loans related to the foreign exchange crisis was August 23, 2001. This is distinct from December 3, 2000, when the IMF standby loan agreement period ended. Q. Can the estimated value of the collected gold be treated as the amount repaid to the IMF? A. The estimated value of the collected gold represents the value of the gold collected. It is different from the amount actually paid to the IMF. Using it directly to calculate the percentage of debt repaid could misrepresent the flow of funds. Q. What is the criticism that responsibility was shifted onto the public? A. The criticism is that the public's sacrifice was emphasized over the structural responsibility of the government and companies. Even while acknowledging the contribution of public participation, the causes of and responsibility for the crisis can be examined separately. Q. Is the official letter requesting cooperation in public participation a 1998 document? A. The National Archives of Korea's detailed listing gives 1997 as the year the document was created. This is different from the start date of the 1998 broadcast campaign. The exact date it was put into effect and what it requested must be checked against the original letter. Sources - National Institute of Korean History, Our History Net: The IMF Crisis: https://contents.history.go.kr/mobile/kc/view.do?code=kc_age_50&levelId=kc_i501300 - National Archives of Korea, Discovering the Republic of Korea Through Records: Overcoming the IMF Foreign Exchange Crisis: https://theme.archives.go.kr/next/koreaOfRecord/imf.do - National Archives of Korea: Request for Cooperation in Participating in the to Overcome the Foreign Exchange Crisis, Detailed List of Records: https://archives.go.kr/next/newsearch/showDetailPopup.do?rc_code=1310377&rc_rfile_no=200802049512&rc_ritem_no=000000000021&sitePage=1-2-1 - Chosun Ilbo: Background to Participation in the Gold Collection Campaign and Coverage of Campaigns by Broadcaster, February 19, 1998: https://www.chosun.com/site/data/html_dir/1998/02/19/1998021970179.html - IMF Working Paper 01/154: From Crisis to Recovery in Korea: Strategy, Achievements, and Lessons: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2001/_wp01154.pdf - IMF: Korea, History of Lending Commitments: https://www.imf.org/external/np/fin/tad/extarr2.aspx?date1key=2025-06-30&memberKey1=550 - IMF: Managing Director Congratulates Korea on Early Repayment of 1997 Stand-By Credit, August 22, 2001: https://www.imf.org/en/news/articles/2015/09/29/18/03/nb0182 - IMF: Korea, Transactions with the Fund, Disbursements and Repayments Detail, 2001: https://www.imf.org/external/np/fin/Tad/extrans2.aspx?acctType1=GRASDA&extrans_flag=Y&memberKey1=550&valueDate=2001&yearType=C - Cheon Hye-jeong, 2017: The Social Construction of Memories of the IMF Foreign Exchange Crisis: Focusing on Chosun Ilbo Articles on the ‘Gold Collection Campaign’: https://www.kci.go.kr/kciportal/landing/article.kci?arti_id=ART002276868 Images - People queue at a bank counter while a clerk weighs gold jewelry on a scale.: https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MjUxNTYsInB1ciI6ImJsb2JfaWQifX0=--546f34dd9c429fddb511543ffbe43f0532a55513/ai-3ff54b38.webp - Gold jewelry and a scale sit in a cargo warehouse as workers load cases onto a pallet near an aircraft.: https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MjUxNjIsInB1ciI6ImJsb2JfaWQifX0=--855d5dcf13e35432eeaa8663a451180828319ad3/ai-e7167d18.webp --- Category: Case Study Source: https://injoys.com/en/articles/imf-crisis-1998-gold-collection-process-and-results License: cc_by Translation-Status: reviewed