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.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
BULLY TACTICS: Beijing has continued its incursions into Taiwan’s airspace even as Xi Jinping talked about Taiwan being part of the Chinese family and nation China should stop its coercion of Taiwan and respect mainstream public opinion in Taiwan about sovereignty if its expression of goodwill is genuine, the Ministry of Foreign Affairs (MOFA) said yesterday. Ministry spokesman Jeff Liu (劉永健) made the comment in response to media queries about a meeting between former president Ma Ying-jeou (馬英九) and Chinese President Xi Jinping (習近平) the previous day. Ma voiced support for the so-called “1992 consensus,” while Xi said that although the two sides of the Taiwan Strait have “different systems,” this does not change the fact that they are “part of the same country,” and that “external
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source