Your Money or Your Life!

THE ASIAN CRISIS AND ITS INTERNATIONAL REPERCUSSIONS/227

import licences has become automatic, except for a small number

of items that threaten public health and safety' (IMF 1997).

2. On the question of privatisation. 'Over the last ten years, the
   authorities have partially implemented two different programmes
   of privatisation of state-owned companies. The programme
   adopted in December 1993 set out to privatise 58 of 133 state-
   owned companies in the 1994-1998 period. By mid-1996, 16
   companies had been privatised'.


3. On the liberalisation of capital flows. 'IMF governors were also
   pleased with the recent liberalisation of capital flows. While some
   governors backed a progressive approach to reforms in this field,
   a number of others feel that rapid and wide-ranging liberalisation
   would be very advantageous at South Korea's current level of
   economic development.'

The IMF report on South Korea concludes, 'the board of directors
was pleased with the broadening of structural reforms, especially as
concerns the labour market and privatisation. These reforms should
boost productivity gains and ensure the competitiveness of the South
Korean economy' (ibid.). Finally, from early 1997 onwards, IMF
governors backed South Korean government plans to reform the
labour code to make it easier to lay off workers.

What Were the Causes of the South Korean Crisis?

South Korea's industrial development is more advanced and began
long before that of the four 'dragons'. Some South Korean multina­
tionals had even managed to compete head-to-head with powerful
companies from the advanced industrialised countries in a number
of sectors (computer semiconductors, automobiles, shipbuilding,
industrial goods). South Korea's share of the world market continued
to grow until 1996.
The South Korean development model was in many ways the
antithesis of the neo-liberal model. It involved a radical agrarian
reform in the 1950s, industrialisation fostered and protected by the
state, military dictatorship and repression of the trade union
movement, followed by significant concessions to labour in the face
of powerful working-class mobilisation. After the Japanese, South
Korean workers have the highest wages in Asia.