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Sender: owner-imap@webmap.missouri.edu
Date: Sat, 13 Dec 97 22:18:21 CST
From: rich@pencil (Rich Winkel)
Organization: PACH
Subject: Clinton Demands Koreans Adhere To IMF Program
Article: 23993

/** labr.global: 254.0 **/
** Topic: Clinton Demands Koreans Adhere To IMF Program **
** Written 2:53 PM Dec 12, 1997 by labornews in cdp:labr.global **

US Stresses Korean Economic Reforms

Associated Press, 11 December 1997

WASHINGTON (AP)—As South Korea’s financial crisis continued to rattle investors around the world, the Clinton administration stressed the importance of tough economic reforms being demanded of the Asian nation by the International Monetary Fund.

The ultimate and only path back to recovery is for a country to take ownership of a strong (IMF) program—they do have a strong program—and then to implement it effectively, Treasury Secretary Robert Rubin said Thursday.

Rubin’s comments to reporters came on a day when the growing Asian currency crisis unnerved financial markets. The Dow Jones industrial average lost 129.80 points under the weight of growing worries about what Asia’s financial problems will do to the profits of U.S. corporations doing business in the area.

In Seoul, Kim Young-sam, the country’s lame-duck president, publicly pledged to honor the commitments South Korea made in order to reach agreement on a $57 billion emergency rescue package, the largest such bailout in IMF history.

But doubts persisted since the leading candidate in next week’s presidential election, Kim Dae Jung, has published front-page advertisements vowing to renegotiate the terms of the IMF agreement.

Rubin repeatedly stressed in response to reporters’ questions that South Korea’s best chance of overcoming its current financial problems would be to adhere to the terms of the IMF agreement.

They have taken a number of very important measures and they have a lot to do and that’s the process that’s under way, he said. The key in this is for them to fully and effectively implement that program and this is the absolute key to ... re-establishing confidence in the financial market.

South Korea’s finance minister, Lim Chang Yuel, has urged the United States and Japan to immediately provide their conditional commitments of $5 billion and $10 billion, respectively. The two governments made the offers as a second line of defense should the initial $35 billion of support put together by the IMF prove to be inadequate to stabilize the Korean economy.

Lim, in an interview with The New York Times, said If the U.S. and Japan are committed to supporting the Korean economy, they should support the economy at the early stage, rather than waiting.

While Rubin refused to specifically address Lim’s suggestion, it was clear in his remarks that the administration was not considering at this time accelerating the U.S. financial support.

Meanwhile, the IMF continued to work on a proposal to create a new lending window at the IMF for countries facing financial crises of the type that so far this year have engulfed South Korea, Thailand and Indonesia.

The new loan program would be called the Supplemental Reserve Facility and it would be designed to provide larger amounts in emergency loans at higher interest rates than are normally supplied under the existing programs at the IMF.

The program would implement suggestions drawn up by the United States and other Asian countries at a meeting in Manila, the Philippines. Those recommendations were endorsed by President Clinton and 17 other Pacific Rim leaders at their summit in Vancouver, British Columbia.

The IMF proposal is scheduled to be taken up by the agency’s 24-member executive board Monday.