It's a crime that even the most creative novelists and screenplay writers wouldn't come up with.
All the staples of a good story -- murder, intrigue, police chases -- are there. Yet the motive seems too fanciful: Debt.
Welcome to South Korea, the site of such bizarre goings on.
Just last week, two men posing as taxi drivers strangled six women within 48 hours. The motive: Robbery to pay off credit card debts. A handful of others have been killed for similar reasons, while suicides by overextended cardholders are on the rise.
It's the most extreme side effect of the nation's sudden love affair with plastic. While names like American Express, MasterCard and Visa have been here for many a year, Koreans are savers who've long favored cash over credit.
That's all changing now. Walking around the streets of Seoul, one confronts a barrage of hawkers handing out credit-card applications. It's a reminder that South Korea is a rapidly growing market for card issuers. Data show that credit-card use has risen roughly 90 percent a year since 1998. And South Koreans, who two years ago averaged fewer than two cards apiece, now use four.
The trend worries economists who wonder if South Korean households, who have less experience with high-interest debt than peers abroad, are getting in over their heads. Part of the problem, they say, is that a fast-growing number of credit-card transactions aren't purchases, but cash advances.
"It's not a huge, huge problem yet, but it's something Korean authorities need to keep an eye on," says like Andy Xie of Morgan Stanley Dean Witter & Co.
The government deserves some of the blame. Seoul, in an effort to cut down on tax fraud among merchants, offered consumers tax breaks for using plastic. That not only encouraged people to use credit cards more often, but also drove banks and non-bank lenders to step up marketing efforts. Government tax revenue may be up, but so are individual debt levels.
Concerns about a credit bubble may help explain why the central bank here is so set on raising interest rates. Even though South Korea is seen growing 5.7 percent this year, inflation isn't a big problem yet. The Bank of Korea, however, is looking ahead and figuring it should tap on the brakes. Rising household borrowing may be one of the catalysts for such a move.
A hike in borrowing costs would be a faster way of slowing credit growth than anything the government could do. After all, credit cards aren't hard to get here. Walk down many major streets and you'll see tables and chairs set up -- all you do is fill out a quick application, and you're almost assured a card.
Given its traditional preference for cash, South Korea lacks sophisticated networks of credit-history reports.
All of this has local economists and politicians urging steps to rein in credit growth. Suggestions include making it harder to get plastic. Only recently, for example, have issuers been asked to obtain proof of income from young applicants. Also being mulled are steps to reduce cash-advances and scrutinize non-bank issuers, including those huge business groups known as chaebol.
Marketing of credit cards picked up after the 1997 Asia financial crisis. Banks had made a good living lending to chaebol. But when the roof fell in, the government directed banks to lend elsewhere. Much of the lending at first was for homes and cars. Nowadays, credit-card debt is becoming a bigger share of that whole.
Of course, the controversy may be overdone. The trend could merely be part of South Korea's move to normal-economy status. Before the Asian crisis, its double-digit growth rates were hardly typical of the rest of the world -- nor was its financial collapse afterward. Now that Korea is vibrant again, and consumers are becoming worldlier, credit-card usage may be a sign of economic maturity.
What's troubling, though, is how quickly South Koreans have built up installment debt. Household debt rose 28 percent in 2001 to 341.7 trillion won (US$267 billion). South Korea was home to an estimated 428 trillion won worth of credit-card transactions last year.
This year, the number is expected to reach 550 trillion won.
Not only does it raise questions about the health of household balance sheets but also about South Korea's ability to keep growing at a strong pace. Consumption, at least in part, has been driven by an unsustainable surge in borrowing. If people start borrowing less, or choose to pay down debt, consumption may plunge.
Signs of trouble already are appearing. Consumer loan delinquencies rose a record 17.6 percent in 2001 to 2.45 million, according to South Korea's Financial Supervisory Commission. One million South Koreans have charged up more than 10 million won worth of revolving debt. The trend is leading to some disturbing social problems -- including murder and suicide.
It also could lead to economic troubles, too. If South Korea is in fact experiencing a credit-card bubble, authorities will have to work fast to keep it from hurting Asia's fourth-largest economy.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique