[IWAR] SOUTH KOREA reaction to bailout

From: Michael Wilson (MWILSON/0005514706at_private)
Date: Sat Dec 06 1997 - 10:26:06 PST

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                 Calls mount in South Korea for punishment of officials
          Copyright ) 1997 Nando.net
          Copyright ) 1997 The Associated Press
       SEOUL, South Korea (December 6, 1997 11:06 a.m. EST
       http://www.nando.net) -- For years, South Korea's giant economic
       ministry has been credited with lifting the country out of the ashes of
       the Korean War to become the world's 11th largest economy. This week,
       the economic policy makers were accused of not only leading the country
       into a financial crisis, but humiliating the nation in the process.
       "Fire the Finance and Economy Ministry!" protesters shouted Friday in
       downtown Seoul, unfurling a banner with the same message.
       Newspaper editorials urged prosecutors Friday to bring criminal charges
       against the nation's former and incumbent economic policy makers for
       reducing South Korea to the role of international beggar.
       Newspapers also reported they were flooded with calls from citizens
       demanding punishment for high officials.
       South Korea agreed to a record $55 billion bailout by the International
       Monetary Fund on Wednesday -- a sum that swelled to $60 billion by
       Friday. Local media compared it -- and government handling of the crisis
       -- to the "biggest national humiliation since 1910," when Japan began
       its 36-year colonial rule of Korea.
       Kim Dae-jung, a leading candidate to win the Dec. 18 presidential
       election, vowed to open a parliamentary probe if elected to punish state
       economic planners.
       "If necessary, President Kim Young-sam will have to stand before the
       Parliament," he said.
       Other candidates demanded that President Kim relinquish power
       immediately after the election -- a humiliating slap at a man who came
       to power vowing economic reform. Kim's five-year tenure ends in
       "The prosecution is agonizing over what it can do to help resolve the
       nation's economic difficulties," said chief prosecutor Lee Won-sung.
       Lee was commenting on reports that prosecutors were investigating
       allegations that senior economic officials lied to the people about the
       condition of the economy and ignored warnings months before a currency
       crisis hit.
       "Even when a crisis was evident, all the Finance and Economy Ministry
       and other policy makers did was hide and distort the reality," said the
       daily Kookmin Ilbo.
       Only days before South Korea applied for an IMF bailout Nov. 21, Finance
       Ministry officials insisted publicly that the country had enough
       ammunition in its foreign reserves to fend off "foreign speculative
       forces jealous of South Korea's economic success."
       "We don't need it, we don't want it. What more explanations do you
       need?" one ministry official shouted to a reporter two days before South
       Korea turned to the IMF for help.
       When international publications reported on the nation's dwindling
       foreign reserves, ministry officials threatened to sue.
       After negotiations began with the IMF, South Korea announced four times
       in a week that it had a done deal -- only to see it unravel when the IMF
       said there was more work to be done.
       "I am so ashamed about the way they handled this. Even a beggar retains
       a certain level of dignity when begging for a bowl of rice," said Chang
       Do-man, a taxi driver in his late 50s.
       "Incompetency, Lies and Shifting Responsibility," the leading daily
       Dong-A Ilbo shouted in a headline Friday.
       It pointed out that South Koreans got even angrier when government
       officials appeared to shift the blame on the people by suggesting they
       had spent too much on overseas travel and foreign goods.
       In ensuing frugality campaigns -- some organized by
       government-subsidized groups -- school children donated U.S. dimes and
       nickels in the lame belief that could help the economy.
       Economists say South Korea could have avoided the IMF bailout if it had
       heeded reforms and prescriptions recommended by the Organization of
       Economic Cooperation and Development and others.
       "Most of the IMF's prescriptions are what economists at home and abroad
       have recommended for years," said Yun Kun-young, an economics professor
       at Seoul's Yonsei University. "Government policy makers were just too
       arrogant to admit their mistakes."
       -- By SANG-HUN CHOE, The Associated Press 

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