Re: [A-List] IMF: Korea and elsewhere

["Christian Gregory"<christian11@xxxxxxxxxxxxxx>]

BTW, GDP below in won (billions); FDI in $ (millions).

On Mon, 07 Oct 2002 12:05:02 -0400 Christian Gregory
<christian11@xxxxxxxxxxxxxx> wrote:

>
> Year  GDP     %ch  %wage  unemp FDI
>
> 1996 418479.0 11.7  11.9   2.0  3203
> 1997 453276.4  8.3  7.0  2.6  6971
> 1998 444366.5  -2.0 -2.5  6.8 8852
> 1999 482744.2  8.6  12.1  6.3 15541
> 2000 521959.2  8.1  8.0   4.1 15690
> 2001 545013.3  4.4  4.1
>
> The general critique of the IMF goes without
> saying, but I wonder if the case
> isn't more complicated for Korea. Unlike most
> developing nations on which IMF
> "help" is foisted, Korea had a strong (though
> vulnerable) banking system and
> an excellent manufacturing base. So, while
> unemployment is still double what
> it was before the crisis, the current account
> surplus is now huge, as are the
> foreign reserves. (At $102 billion, about 1/4th
> of GDP.) Wages are growing,
> and in $ terms, GDP is back to roughly 1995
> levels, having grown about 40%
> from the low point of 1998. (Some of the
> downdraft from the high point of 96
> has to do with the unhinging of the won from
> the dollar, certainly a good
> thing for Korea's exporters.)
>
> While this is clearly not great, it's not
> Brazil either. The increase in FDI
> could be a good or a bad thing, depending on
> your point of view. Although it
> might be taken to indicate the ease with which
> Korean assets were snatched up
> by foreigners after the crisis, at the end of
> the day you have to wonder about
> the lamentations of foreign ownership of
> capital. So what? It is hard to see
> how this is worse than being subject to
> short-term inflows, which Korean banks
> were awash in.
>
> The problem with IMF dictats is that they treat
> all crises as deriving from
> excess demand (as would happen in an
> industrialized country); Korea was lucky
> enough to have an industrial base capable of
> "working," as it were, in IMF
> constraints.
>
> Christian
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