Reforming of the industrial and trade policy -: The right way for the financial recovery of the South Korea economy

For the past three decades, South Korea has remained one of the fastest growing economy in the world. Even with the financial crisis since end of 1997 to mid-1998, this country continued succesful by development of strong economic fundamentals. The causes of financial crisis were generally concentrated in two main areas: influence of structural factors inherent in Korean capitalism and unsustunaible deterioration of macroeconomic results. As is well known, ratio of short term debt was extremely high. The total foreign debt amounted to about USD 150 bill. as of end of 1997. The financial panic caused liquidity crunch that stemmed from the sudden shift in the market expectations and confidence. After the Korean government's decision to accept the "Bailout program" of IMF and rescue financial package, the economy has been undergoing significat changes in most important spheres. There were concentrated to the area of the activities of financial and banking institutions, restructuralization of industrial policy, adaptation processes of various activities of leading business conglomerats - chaebols (merging). On the other hand many experts called attention to the need for changes to the global financial system. The main internal point of the sucess of the Reform program depends on the ability to change the industrial and export structure of domestic economy and create the favourable developing space for foreign investors. The danger of financial crisis is in its expansion across Asia during past year and finally in beginning the reverbate world-wide.