S. Koreans should remain wary despite debt progress<\/p>\n
SEOUL (Reuters): South Koreans should not let down their guard
\ndespite signs that the country's massive debt crisis may be
\neasing, analysts said yesterday.<\/p>\n
\"South Korea is still a sick patient in need of intensive
\ncare,\" said Kim Se-jin, research fellow at the Korea Economic
\nResearch Institute.<\/p>\n
A dramatic plunge in the Indonesian rupiah triggered by
\ninternational criticism of the country's new budget led to
\nwhispers about a debt moratorium last week.<\/p>\n
By Friday, U.S. President Bill Clinton had stepped into the
\nAsian financial crisis, telling Indonesian President Soeharto
\nthat Jakarta had to comply with the International Monetary Fund
\n(IMF) reforms.<\/p>\n
South Korea is also under an IMF program of nearly $60
\nbillion, but its reform efforts have been seen as positive by
\nglobal investors.<\/p>\n
The Sunday edition of the Hankook Ilbo said in its editorial:
\n\"The thin ice we are walking on can give out any time even at the
\nslightest shock.\"<\/p>\n
The paper said currency crises in Indonesia and Thailand was a
\n\"stark reminder of the cruel realities\" faced by Korea.<\/p>\n
South Koreans have grown more optimistic in recent days amid
\nsigns of a let-up in the country's financial crisis. The local
\nstock market has rebounded more than 17 percent so far this year,
\nwhile the battered won has stabilized against the dollar.<\/p>\n
The country's tough austerity campaign also appears to be
\ntaking hold, swinging its current account balance to a surplus in
\nDecember.<\/p>\n
Seoul's efforts have also received positive feedback from
\noverseas. International Monetary Fund deputy managing director
\nStanley Fischer said last week the South Korean economy was
\nlikely to recover soon.<\/p>\n
\"In the past, the Korean economy has shown remarkable powers
\nof recuperation when faced with a big crisis, and we have seen a
\nlittle bit of that already,\" he told CNN.<\/p>\n
South Korea's financial diplomacy is in high gear as global
\ncreditors study rolling over loans to Korean banks.<\/p>\n
The transition government led by president-elect Kim Dae-jung
\nwill send a high-powered debt negotiation team to New York later
\nthis month in an effort to get a seal of approval from the
\nforeign investment community for Korea's reform.<\/p>\n
\"It's too early to tell where we are going. If you look to the
\nright, it may look like spring time but to the left it's still
\ndeep winter,\" said Oh Yeon-seok, head of equity sales at Hannuri
\nInvestment & Securities.<\/p>\n
On Saturday, Kim Dae-jung's party issued a public warning that
\nSouth Korea's crisis was far from over.<\/p>\n
\"The crisis is continuing despite some atmosphere of
\noptimism,\" said Chung Dong-young, spokesman for the National
\nCongress for New Politics.<\/p>\n
\"Foreign investors are still looking at the Korean situation
\nwith suspicion,\" he said.<\/p>\n
Moody's Investors Service on Friday cut Korea's foreign
\ncurrency bank deposit ceiling because of the forced rollover in
\nlate December of interbank credits.<\/p>\n
\"These rollovers are a default in the way we define it,\" the
\nagency explained.<\/p>\n
South Korea's economic reform also faces one crucial hurdle.
\nPowerful trade unions oppose layoffs, which Kim Dae-jung and his
\nnew government insist are essential to bring back foreign
\ninvestors.<\/p>\n
On Saturday, the militant Korea Confederation of Trade Unions
\n(KCTU) said it would not participate in proposed talks to discuss
\nlayoffs. It renewed its threat of an all-out struggle against
\nlegislative moves to make layoffs easier.<\/p>\n
South Korea's National Assembly plans to hold a special
\nparliamentary session this week to pass bills aimed at speeding
\nup layoffs at troubled financial institutions before the
\nintroduction of industry-wide layoffs.<\/p>",
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