[FOUNTAIN]A note for the teacher

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[FOUNTAIN]A note for the teacher

"I fully understand the results of the talks with the International Monetary Fund, and in the event that I am elected president, I agree to abide by what has been agreed upon."

All the candidates in the presidential election five years ago signed such a pledge in order to get the IMF money flowing, taking time out from their campaigns only two weeks before election day.

That day, Dec. 3, 1997, was very cold. Temperatures in Seoul dropped to 12 degrees below zero centigrade, and people felt even colder in their hearts. They were aware that the country was being swallowed by a crisis that seemed unrelenting.

In contrast, authorities at the IMF were cozy and relaxed. After the Korean government announced its intention to seek an IMF bailout, Hubert Neiss, the IMF representative, arrived in Seoul. During 10-odd days of negotiations, Mr. Neiss laid out the fund's demands, which included closing troubled merchant banks and lifting the limit on foreign acquisitions of financial securities. Michel Camdessus, head of the IMF, arrived in Korea on the morning of the last day of negotiations. "It may be painful now, but patiently carrying out the plan will, in a few years, make the Korean economy strong," he told Kim Young-sam, treating him like a teacher guiding a pupil. Mr. Camdessus refused to sign the letter of agreement with Korea on the bailout until the three major presidential contenders agreed to honor the terms of the agreement if they were elected.

Initially the government ignored that demand. An official at the Blue House said, "After the fall of the Soviet Union, Russia inherited the responsibility for foreign debt." He added, "The IMF demands reflect a lack of respect for the country." But a beggar could not be a chooser, and the only IMF concession was that the three contenders addressed their pledges to the president rather than the fund.

Mr. Camdessus, concealing his sword with a warm smile, at last signed the letter of agreement late that day. JoongAng Ilbo's headline the next day was "Korean economic sovereignty snatched away for three years." I wrote a column reflecting on my failure to warn of the economic crisis in time. I conveyed in my reporting an economic illusion, reporting the government's assurances without critical analysis.

Five years have passed.



The writer is head of the Forbes Korea team of the JoongAng Ilbo.


by Sohn Byoung-soo

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