South Korea has fully recovered from the devastating 1997 economic crisis, the government said yesterday on the eve of its anniversary, but commentators said crucial reforms were still not in place.
On Nov. 21, 1997, Seoul asked the IMF for a bailout of US$57 billion -- the largest in the fund's history -- to avoid a state bankruptcy.
In return it effectively gave up sovereignty over the economy, accepting tough austerity measures -- including high interest rates -- prescribed by the IMF.
The turmoil swallowed up 16 of the 30 largest business conglomerates, including the second-largest Daewoo Group, and forced some 900 financial institutions out of business.
Millions lost their jobs due to corporate restructuring and insolvencies, even though the government injected some US$180 billion to bail out failing businesses and financial institutions.
But the finance ministry said the restructuring and austerity measures paid off.
Foreign exchange reserves have recovered from US$204 million at the end of 1997 to US$260 billion, making the country the world's fifth-largest foreign exchange holder.
Sovereign ratings, once at junk bond levels, recovered and the won rebounded from 1,962 won per US dollar in December 1997 to less than 920.
"Sovereign ratings have been rising, reflecting South Korea's economic recovery, increase in foreign exchange reserves and restructuring of insolvent businesses," the ministry said in a report marking the 10th anniversary.
The average ratio of business debts against assets fell from 400 percent to 80 percent over the 10-year period, while profitability in terms of earnings against sales improved from 2.1 percent to 5.9 percent last year.
However, the crisis left many businesses wary of new investment, resulting in slower facility investment and lower economic growth.
"Conservative management and low investment took their tolls on economic growth as increased use of hourly workers [instead of full-time staff] led to growing income gaps," said Hwang In-sung of Samsung Economic Research Institute.
Dong-A Ilbo newspaper said in an editorial that initiatives in the public, finance, business and labor markets had not been completed.
"Hostile labor-management relations have not been resolved. Inefficiencies and regulations may have been exacerbated, not mitigated, over the past 10 years. Job insecurity and youth unemployment have become commonplace," it said.
The newspaper also cited rising income gaps, an increasing national debt and growing household debts.
"All these indicate that an economic crisis may be approaching us once again," it said.
The paper added it was crucial for the economy to become vibrant "to get out of the low-growth trap" and open a new decade of further growth.
Taiwan aims to open 18 representative offices and seven Taiwan Tourism Information Centers worldwide by next year to attract international visitors, the Tourism Administration said on Saturday. The agency has so far opened three representative offices abroad this year and would open two more before the end of the year, it said. It has also already opened information centers in Jakarta, Mumbai and Paris, and is to open one in Vancouver next month and in Manila in December, it said. Next year, it would also open offices in Amsterdam, Dubai and Sydney, it added. While the Cabinet did not mention international tourists in its
EYES AT SEA: Many marine enthusiasts have expressed interest in volunteering for coastal patrols, which would help identify stowaways and illegal fishing, the CGA said Six thousand coastal patrol volunteers are to be recruited for 159 inspection offices to enhance the nation’s response to “gray zone” conflicts, Coast Guard Administration (CGA) sources said yesterday. Volunteer teams would be established to increase the resilience of coastal defense systems in the wake of two unlawful entries attempted by Chinese over the past three months, Ocean Affairs Council Minister Kuan Bi-ling (管碧玲) said. A former Chinese navy captain drove a motorboat into the Tamsui River (淡水河) in Taipei on the eve of the Dragon Boat Festival in June, while another Chinese man sailed in a rubber boat into the Houkeng
NEXT LEVEL: The defense ministry confirmed that a video released last month featured personnel piloting new FPV drone systems being developed by the Armaments Bureau Taipei and Washington are pushing for their drone companies to work together to establish a China-free supply chain, the Financial Times reported on Friday. A delegation of high-level executives and US government officials were yesterday to arrive in Taipei to discuss with their Taiwanese counterparts collaboration on drone technology procurement and development, the report said. The executives represent 26 US manufacturers of drone and counter-drone systems, while the officials are from the US Department of Commerce and the US Department of Defense’s Defense Innovation Unit, along with Dev Shenoy, principal director for microelectronics in the Office of the Under Secretary of Defense
‘ANONYMOUS 64’: A national security official said that it is an attempt by China to increase domestic anti-Taiwanese sentiment and inflame cross-strait tensions The Ministry of National Defense’s (MND) Information, Communications and Electronic Force Command (ICEFCOM) yesterday denied accusations by China that it had undermined regional security by carrying out cyberattacks against targets in China, adding instead that Beijing was responsible for raising tensions and undermining regional peace. The Chinese Ministry of State Security on WeChat accused a hacker group called “Anonymous 64” of targeting China, Hong Kong and Macau starting earlier this year through frequent cyberattacks. The group carried out cyberattacks to seize control of Web sites, outdoor electronic billboards and video-on-demand platforms in China, Hong Kong and Macau, it said, adding the hackers’