| [ MIT ] in KIDS 글 쓴 이(By): chosta (chosta) 날 짜 (Date): 1997년11월23일(일) 04시26분40초 ROK 제 목(Title): 오늘 Boston Globe 경제면에 한국 금융위기가 대문짝만하게,, 임창열 부총리 가 IMF 지원을 받기로 발표한 기자회견 사진을 필두로.. Fears rise that S. Korean financial ills may spread By Aaron Zitner, Globe Staff, 11/22/97 WASHINGTON - It is one of the ''Asian Tigers,'' its image is a poor, agrarian, and war-torn country wiped out by glittering growth and prosperity. Its autos and electronics have won a place in Western showrooms. Unthinkable only a few decades ago, it has matured into the world's 11th biggest economy. Now, however, South Korea has fallen victim to the financial contagion sweeping Southeast Asia, and it is asking for billions of dollars in international help. In the United States and elsewhere, many are hoping the remedy aid will stop the illness before it spreads to an already weakened Japan - or beyond. Yesterday, the International Monetary Fund promised to give South Korea a shot in the arm. It would be the fourth IMF bailout in Asia this year, after Indonesia, Thailand, and the Philippines. The size of the aid package was not revealed, but analysts estimate the country could need anywhere from $20 billion to more than $60 billion to recover. The IMF hinted that any loans it makes might be supplemented by individual nations, possibly Japan and the United States. The IMF offer came after South Korean officials asked for aid late Thursday, and after weeks of resistance to what they see as an embarassing move, unworthy of a financial powerhouse. The situation ''is pretty shocking,'' said Chen Zhao, managing editor of Emerging Market Research in Montreal. The Asian bailout, he said ''has become massive.'' The IMF announcement was greeted with relief in the United States, where investors worried that Korea's problems would aggravate the sharp volatility plaguing markets worldwide since the outbreak of the ''Asian flu'' last summer. The Dow Jones industrial average closed up 54.46 points to 7881.07. Most important to the United States, some analysts said, is that the IMF loans will help South Korea shore up its banking system. A collapse threatened to bring down banks in Japan that loaned heavily to Korean companies and that are already weak from bad loans. Because Japan is such a powerhouse, financial problems there could spread to China and perhaps even the United States. ''As with any kind of virus, the more people come down with it, the more nervous those of us without it get,'' said Nancy Kimelman, chief economist at Technical Data in Boston. ''And so the question is the contagion effect, how contagious it will be.'' The IMF package will also provide South Korea with money to invest in its own currency - the won - to reverse a slide in its value. That could also be good news for the United States, because a cheaper won makes it easier for South Korean companies to sell their goods overseas, forcing US companies to cut their prices. A continually weakening won might have forced even Japan and China to devalue their currencies, to prevent exchange rates from making their products relatively more expensive on world markets than products from South Korea. The weak won also makes it harder for South Koreans to buy goods from the United States and other nations. South Korea is the fifth-largest buyer of US goods, after Canada, Japan, Mexico, and the United Kingdom. The won and Korean stocks rose sharply on news of the IMF's pledge. The won closed yesterday at 1,065 to the dollar, up sharply from Thursday's close of 1,139. The composite stock index ended at 506.07, up 3.6 percent, or 17.66 points, from the previous day. In early Saturday trading, however, stocks had given up that gain and were headed even lower. The crisis that has now hit South Korea started in Thailand this summer. Since then, markets and currencies have plummeted in the region, particularly in Malaysia, Indonesia, and the Philippines. The Hong Kong stock market has also suffered losses. In turn, that helped prompt a 187-point drop in the Dow on Oct. 23 and a record 554 points on Oct. 27. The US market has since bounced back, though not all the way to its peak. South Korea has enjoyed solid economic growth in recent years, with the annual growth rate topping 10 percent in the early 1990s. It is the largest of the Asian Tigers - the others are Hong Kong, Singapore, and Taiwan - that emerged in the 1980s as vibrant economies to challenge Japan. But Korea built too many factories, analysts say, which are now suffering because of overcapacity throughout the region. The country's manufacturers are making products, but not enough people are buying them. In fact, some of the growth numbers may be artificially propped up as factories build up inventories without selling all their goods. ''Production has gone haywire,'' Kimelman said. At the same time, banks in South Korea fueled the growth by making loans that have now gone bad. By some estimates, as much as 20 percent of South Korean bank loans are considered ''nonperforming.'' In exchange for a loan package, the IMF may require South Korea to take unpopular austerity measures to help repay the loans and to fix the banking system. Those steps could lower the standard of living and prompt South Koreans to buy fewer US goods. However, some analysts say the economy also has many strengths, and Michel Camdessus, managing director of the IMF, yesterday said the crisis had arisen ''despite sound macroeconomic trends.'' Estimates of the amount South Korea needs from the IMF range from the government's $20 billion to private financial analysts' estimates of $60 billion or more. The IMF's sister organization, the World Bank, yesterday said it did not expect to join the Korean program because the country's per capita income is too high to qualify. The bank was part of a $23 billion package put together by the IMF for Indonesia this month. The help for Korea most likely will be similar to the Indonesia bailout, which involved loans from the IMF and the Asian Development Bank, backed up by a second line of potential loans from the United States, Japan, and other rich nations. The United States's share of the Indonesian arrangement was $3 billion. Camdessus said an IMF mission will arrive in Seoul next week to negotiate terms of the rescue package. His deputy, Stanley Fischer, met with Korean officials in Seoul Thursday. The largest rescue package the IMF has put together so far is $50 billion for Mexico in 1995, followed by Indonesia's $23 billion, and Thailand's $17 billion in October. Earlier in the year, the IMF put together a $1 billion program for the Philippines. Material from Globe wire services was used in this report. This story ran on page E01 of the Boston Globe on 11/22/97. � Copyright 1997 Globe Newspaper Company. > ... Say Yes ... |