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How Squid Game is rooted in the Korean debt crisis

The premise of this hit Netflix show may seem fantastical, but it actually reflects the harsh realities of the debt crisis in Korea  

A scene from 'Squid Game'. Image via AP
A scene from 'Squid Game'. Image via AP

Last week, a tweet from Netflix confirmed what a lot of viewers had suspected: The South Korean survival drama Squid Game has become one of the most popular shows on the streaming service globally, with 111 million confirmed fans. Written and directed by Hwang Dong-hyuk, Squid Game is about 456 debt-ridden strangers (most of them living in modern-day Seoul) who are invited to play a series of survival games in which elimination equals gruesome death. That the players still choose to play is due to the black hole of debt (often aided by a gambling problem) they find themselves in.

Seong Gi-hun (Lee Jung-jae) is a gambling addict who owes money to some dangerous people, Cho Sang-woo (Park Hae-soo) is a former investment banker who stole money from clients and was caught. Abdul Ali (Anupam Tripathi) is a Pakistani migrant worker who plays the game to feed his family, since his Korean employers have not paid him for months.

Also read: Squid Game review: Why the biggest show today is one of the weirdest

Squid Game obviously references several dark chapters from South Korea’s history—the visuals of gun-toting guards overseeing hundreds of jumpsuit-clad players in a gymnasium-like setting are, for instance, inspired by photographs of South Koreans in concentration camps in the 1980s, during President Chun Doo-hwan’s “Social Purification” campaign. The debt angle is a big part of this allusive style.

After the 1997 Asian currency crisis, the Korean economy tanked and household debt levels rose to record levels, thanks to growing unemployment and wage stagnation. In the years that followed, the government encouraged banks to lend freely, even recklessly, to college students and others without an established credit history. In 2002, household debt in the country surged to $365 billion (around 27,000 trillion now), about 48% of Korea’s total financial assets—about twice that of most industrialised nations. Disposable income fell from about 23% in 1998 to less than 10% in 2002 (for more on this, read Dongchul Cho’s 2015 book Growth, Crisis And The Korean Economy, published by Routledge). Household debt too has skyrocketed in recent years, and it’s highest among people in their 20s and 30s.

A 2003 assessment by the Boston Consultancy Group found that over 40% of Korean households had a negative net worth and given their income levels, were incapable of lifting themselves out of debt. “Payday loan” businesses, a source of much debate and criticism in the US currently (John Oliver tore into this industry in a memorable 2014 segment on his show), are huge in South Korea, simply because of the sheer number of people desperate for hard cash.

Naturally, gambling problems too became a reality for many of these households. According to the National Gambling Control Commission in Seoul, about 6.1% of Koreans struggled with a gambling addiction in 2012, which is about two-three times the norm in the US and major European countries. Then there’s also the fact that the government wants to build a casino ecosystem which excludes South Koreans. Both in-person and online gambling are illegal for Korean citizens; out of the 23 functional casinos in the country, only one, the Kangwon Land Casino, allows Koreans to gamble. And it is located far north of the major cities, at the foot of a ski resort (at over 25,000 sq. m in floor area, it currently accounts for nearly half of the annual gambling revenue).

Anupam Tripathi, the actor who plays Abdul Ali, has played similar migrant-in-Korea characters in Korean dramas. In Squid Game, we see how Abdul’s wages were stolen by his employers. This is also, in part, a reflection of how Korea’s labour laws were changed after the 1997 crisis and the resultant loan from the International Monetary Fund (IMF). The IMF, of course, insisted on a slew of “market-friendly” reforms. Companies were free to hire and fire on the basis of “management requirements”—at their pleasure, in other words.

Director Hwang Dong-hyuk has cited many films and shows as inspiration for Squid Game, including the well-known manga series Gambling Apocalypse: Kaiji (1996-present), which spawned the Kaiji anime in 2007-08. Kaiji, which also features groups of strangers facing off in high-stakes gladiatorial contests, features a typically Japanese form of gambling: the pachinko machine, a kind of stylised Japanese cross between the pinball machine and the “fruit machines” ubiquitous in American casinos.

Also read: Squid Game spurs search for next Korean hit

Although gambling is illegal in Japan, pachinko machines are allowed on cultural grounds. And while it’s forbidden to hand out cash in pachinko parlours, businesses have found a workaround: gold-plated “tokens”, which are exchanged for cash at collection centres located far away from the parlours. Pachinko parlours are big business for Japan’s entertainment franchises too: for example, Neon Genesis Evangelion (one of the most successful anime franchises in Japan) pachinko machines had earned close to $9 billion between 2004-19, over half of the Evangelion franchise’s total worth.

Squid Game’s global popularity may well be a sign of lean times for middle- and working-classes worldwide. But the way the storyline plays out, the ever-escalating stakes, the inevitability of fiscal desperation, all represent certain hyper-local realities embedded in the show’s allusive flair. By the time season 2 comes around, the world may find itself being educated further in the vagaries of the Korean economy.

Aditya Mani Jha is a Delhi-based writer.

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