S. KOREA MAY NEED $60 BILLION; FALTERING ECONOMY SPURS CALL FOR IMF BAILOUT.

Byline: Nicholas D. Kristof The New York Times

In a remarkable humiliation for one of the most glittering economic success stories of the late 20th century, South Korea announced Friday night that to avert a financial crisis it will seek a bailout from the International Monetary Fund.

The amount will be negotiated in the coming days, but many economists say the total package of assistance will have to be enormous, perhaps exceeding $60 billion.

That would easily surpass the previous record of $48 billion in IMF aid committed to Mexico nearly three years ago. Mexico ultimately used about half of that amount.

Finance Minister Lim Chang-ryul told a late-night news conference his country will seek $20 billion in IMF loans, plus an additional open line of credit in case that amount is insufficient. Lim also said he expects the United States and Japan, which have rebuffed requests in recent days to provide direct aid to South Korea, to participate in an IMF-led rescue.

With that bleak announcement, South Korea became the latest in a string of Asian nations to redefine the term ``Asian Miracle.'' Once it referred to the stunning march of East Asia from mud huts to skyscrapers in a single generation, but now it seems more a reminder of how far and how quickly these countries' economies, currencies and stock markets have tumbled.

In particular, the transformation of South Korea from industrial giant to international pauper suggests that the Asian financial flu that began in Thailand in the summer and spread throughout Southeast Asia has now begun to spread in Northeast Asia. South Korea's plummeting currency and mounting bad debts may reverberate through Japan, Hong Kong and China, and eventually on to America and the West.

The vulnerability of Japan in particular to the South Korean mess has become a major preoccupation for U.S. monetary officials, who are now viewing the Asian economic crisis as a more urgent threat to U.S. interests because previous IMF efforts to contain it have failed.

It was just a week ago that South Korea called the idea of IMF aid unthinkable. The government agonized over the choices, changing its mind several times before making the final decision Friday night.

Lim described South Korea's problems as a ``temporary funding shortage'' but said international help is the best solution.

The money is likely to be used primarily to help distressed banks repay debts they owe, giving them a chance to restructure an estimated $50 billion in unrepaid loans owed to them.

KOREAN CRISIS AT A GLANCE

WHAT HAPPENED: South Korea resigned itself Friday to a course of action it once deemed unthinkable: It asked the International Monetary Fund for $20 billion and an open line of credit to bail out its foundering economy.

WHY: South Korea boasts the world's 11th-largest economy. But the economy has been spinning out of control for almost a month, the result of a series of major corporate bankruptcies that brought a loss of foreign confidence.

ASIA EFFECT: The crisis has been exacerbated by economic meltdowns elsewhere in Asia, particularly in Thailand and Indonesia, both of which are being rescued by the IMF.

WHAT DID IT DO: Initially, the nation turned to the United States for help, but as with Thailand and Indonesia, Washington steered South Korea to the IMF. Then South Korea turned to Japan, which also gave it the cold shoulder.

WHAT'S NEXT: As in Indonesia and Thailand, the measures could mean tax increases and other belt-tightening measures for the South Korean people as well as government budget cuts.

CAPTION(S):

Photo, Box

Photo: South Korean Finance Minister Lim Chang-ryul addresses the media Friday in Seoul after meeting with IMF officials.

Associated Press

Box: KOREAN CRISIS AT A GLANCE (See Text)