Description:
This book chronicles how Korea dealt
with and overcame the crisis over time. The book is
organized into eleven chapters. Chapter one outlines the
troubling financial market conditions at home and abroad
before the crisis. Chapter two then delves into the origin
of the crisis and offers analyses on the shortcomings of the
Korean economy and the instability of the international
financial system. In chapter three, policy measures the
government executed in the wake of the onset of the crisis
are described and analyzed. Chapter four probes the steps
taken to reduce the risk of sovereign insolvency in the face
of the cool market reaction to the initial package of crisis
response measures announced by the International Monetary
Fund in December 1997. Chapter five describes the background
within which the government established the institutional
framework necessary for corporate, financial, and labor
market restructuring between December 1997 and April 1998.
The government efforts to secure additional foreign currency
liquidity through the markets and to devise initiatives to
counter the massive unemployment are discussed in detail. In
chapter six, the situation during May and June 1998 is
explored with a focus on the closure of nonviable corporate
and financial companies and the efforts to drive down
interest rates and revive credit flows. This is followed, in
chapter seven, by an analysis of the first phase of
financial sector restructuring, which started in the third
quarter of 1998, and the measures adopted to shore up
potential growth and cope with the pressing problem of
unemployment. Chapters eight and nine deal separately with
the restructuring of the top five chaebols (the large
family-controlled and family-run groups that dominate
business in Korea), the economic stimulus packages applied
during the fourth quarter of 1998, the efforts to restore
financial market stability and economic growth, and the
initial phase of foreign exchange liberalization measures,
which were implemented during the first half of 1999.
Chapter ten then discusses the situation during the second
half of 1999, with a particular focus on the collapse of the
Daewoo business group, including the steps taken to contain
the resulting fallout, as well as measures aimed at
expanding the economic recovery. Chapter eleven, the final
chapter, offers a diagnosis of the Korean economy, along
with an analysis of the policy implications and the
responses for the future.