Are We Destined to Revisit '97

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Are We Destined to Revisit '97

Today marks the third anniversary of what was for many Koreans a day of national humiliation when the government applied to the International Monetary Fund for emergency rescue loans. Dispirited after years of unprecedented economic growth, Koreans descended into a dark dungeon of despair during the so-called IMF period.

And now, storm clouds of another economic crisis are amassing on the horizon despite a massive injection of public funds. The number of nonperforming loans has not been reduced and businesses are failing amid an extreme liquidity crunch.

The Daewoo Group collapsed a year ago, but clings to its vestiges as a castaway clings to a piece of debris. The government has been equivocal about what to do with Hyundai Engineering and Construction Co., a main contributing factor to today''s economic instability. At one point, venture firms emerged as a new hope - until the bubble burst in the sector. These companies have added to the growing list of bankruptcies.

Ailing companies should have been liquidated, competitiveness should have been enhanced in a healthy business environment, and new key industries should have been cultivated. Three years after the first crisis, it is frustrating to see that we are still struggling in the first stage of restructuring - the settlement of ailing banks and companies.

Early this year the government prematurely began popping open champagne bottles, claiming the period of IMF supervision was over. The government ignored concerns that another crisis might be around the corner unless restructuring was carried out properly. The Korean people trusted the government when it said that macroeconomic indices looked good and failed to push on with restructuring. We feel as if we are reliving the nightmare of three years ago.

We may not have known clearly what caused the crisis three years ago, but this time around, the causes are crystal clear. We know the solutions: thorough restructuring, cultivation of new industry, improved software to enhance economic efficiency and transparency, and improved crisis management to cope with economic fluctuations. The government also knows that the only way to survive is to undergo painstaking reform according to the rules. Despite this knowledge, we continue to slip toward a crisis.

The problem is the government''s lack of credibility and power to get things done. President Kim Dae-jung must reiterate that he will devote himself to the economy and citizens'' welfare until the end of his term. He should revise the original plan to finalize restructuring by next February. Instead, he should focus on enforcing restructuring for the duration of his term. If we show the same determination we did three years ago, there is no reason we cannot overcome this crisis. The president should place himself above political interests. He should also make the national economy his priority over and above the administration''s inter-Korean policy.

The government must formulate policy based on sound economic principles, and once such policies are made, they should be executed with expeditiously. The government was wrong to intervene in the Hyundai Construction case. As for the plan to introduce financial holding companies, the government must go back to square one and return to the principle of liquidating insolvent banks. Nothing is more absurd than being hit by a crisis because we failed to take the necessary steps. Time is of the essence if we are to avoid another period of national humiliation.
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