Korea and IMF Structural Reforms

Paper Summary:

This essay argues that the IMF structural adjustment program implemented in Korea during its economic crisis has hindered Korea's sovereignty and domestic enterprises by promoting autonomy of the Bank of Korea and liberalization of labour market and foreign trade. Many economists argue that it is urban low-income households in Korea whose living conditions have been most hampered by the IMF structural reforms . This essay also investigates how lives of urban low-income households have been challenged as a consequence of the IMF structural reforms. Fortunately, the economy is recovering slowly. But the legacies of structural reforms still remain; state power over its central bank and legislative branch has not been restored, many of major domestic enterprises are largely owned by foreign investors and the urban poor people suffer from marginalizatoin.

From the Paper:

"The financial crisis that erupted in Asia in mid-1997 led to sharp decline in the currencies, stock markets, and other asset prices of a number of East and Southeast Asian countries . In an astonishingly short period of time, these along with horrendous social consequences have plagued South Korea, a nation that previously had an unparalleled record of economic development . In late November 1997, the Deputy Prime Minister Mr. Lim announced that the Government has requested the IMF's support for an economic stabilization and reform program. Corresponding to this request, the IMF launched an economic stabilization and reform program, composed of three major componenets: exchange market stabilization, financial policies and structural reform."

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