Korean Economic Crisis: What Can We Learn From It?, The

Just like many other crises, the Korean currency crisis came suddenly. In mid-November 1997, headlines in the Korean press consisted mostly of presidential election stories. At that time the presidential race was very close; the Grand National Party candidate, Lee HoiChang, was making a dramatic comeback, while the National Congress for New Politics candidate, Kim Dae-jung, was making his best effort to maintain his narrow lead. Thus, when President Kim Young Sam announced on November 19 his decision to fire key economic policy-makers on the grounds of mismanaging the economy, most Koreans were surprised at the news and questioned the president’s motivation. Two days later they were completely shocked to learn that the Korean government was asking the International Monetary Fund (IMF) for emergency standby loans because the Korean foreign reserve level was very low at $7.3 billion and most foreign financial institutions were unwilling to roll over their short-term loans to Korea.