Leaving aside for a moment the fact that it tells the complex and sadistic deadly games set up by a mysterious organization that first recruits and then segregates hundreds of participants to entertain very rich men, one of the central themes of the Netflix series Squid Game is the debt in South Korea.
It is because of their debts that 455 people participate in those sadistic games in the hope of surviving and thus winning 45.6 billion South Korean won (equal to a little more than 30 million euros). In reality, too, debt is a serious problem in South Korea. It has long been – the creator of the series started working on it more than ten years ago – but things have gotten much worse in recent years, partly due to the pandemic.
South Korea, he wrote the Guardian, “It’s a country where asking for a loan is as easy as drinking a coffee.” Asking for them are freelancers who try to launch or keep their business open, families trying to buy a house (those near a school are particularly expensive) and young people looking for work, who often risk their money in the stock market or in the even more fickle of cryptocurrencies. Young people who often live in houses that one of them called “just a little better than a coffin.”
The problem of the indebtedness of many private individuals is therefore part of the general context of a country with a growing wage gap, with increasing youth unemployment, in which houses are increasingly expensive and in which the social safety net is considered ineffective. and the social pressure to assert itself is extreme.
The recent problems are a consequence of the prodigious economic growth with which in recent decades (the last three in particular) South Korea has managed to overcome the problems following the Korean War of the 1950s, establishing itself as one of the largest Asian powers. However, growth has led to a worsening of inequalities and increasing difficulties and consequent social pressures on millions of South Koreans who, like he wrote the Korea Times, “They must now struggle against the dark side of that growth.”
The total debt of South Korean households has been growing for years (it increased by 10 percent this year compared to 2020) and is now higher than the country’s GDP, something that does not happen in any other Asian country. As explained to the Guardian Lee In-cheol, director of thethink tank Real Good Economic Research Institute, “in individual terms it means that even if a person managed to put aside every single won earned in an entire year, that sum would still not be enough to pay off the debt in full.” In addition to the absolute value of the debt, the number of indebted people is also increasing.
It is also necessary to consider the fact that it is difficult for official data to accurately describe the magnitude of the phenomenon, given the proliferation of people and organizations that – a bit like in Squid Game – they lend money in exchange at very high interest rates, often up to 200 percent per annum, when the maximum allowed in South Korea is 20 percent.
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“It is difficult to have data on the South Korean illegal loan sector” he wrote on the Los Angeles Times the correspondent from Seoul Victoria Kim, “but they seem to be everywhere”. In 2020 alone, the government agency that seeks to oversee this sector received nearly 300,000 reports of illegal lending advertisements, 25 percent more than in 2019.
Kim wrote that, unlike what is shown in Squid Game, it does not seem common among those offering illegal loans to ask for the debtor’s organs as a possible compensation or at least as a form of threat. However, it seems that once upon a time it was really done, and even Seo Jung-jin, one of the richest men in South Korea, said that a couple of decades ago he signed a contract in which he “committed” his organs. Kim wrote that now, among those who lend money illegally, it is more frequent to ask or obtain information about the debtor’s family, relatives and friends, so as to persecute them in various ways if the creditor is in default.
Kim also told the story of one such debtor: a man described as “the owner of a small coffee shop chain” who took out his first illegal loan (with interest at 210 percent) three years ago in order to pay his employees and leave the chain open, already in crisis before the pandemic. The man, who like many others still struggles against the domino effect triggered by loans of that type, said that at the moment he has to repay two loans of about 15 thousand euros within 60 days, but that more generally has total debts in the order of hundreds of thousands of euros. “I have no bitcoin, shares, inheritance or real estate,” he said: “for someone like me, the way South Korea works, it’s impossible to do it without private loans.”
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