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


Byline: Nicholas D. Kristof Nicholas Donabet Kristof (born April 27 1959 in Yamhill, Oregon) is an American political scientist, author, and Pulitzer Prize-winning journalist specializing in East Asia.  The New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 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 IMF

See: International Monetary Fund


IMF

See International Monetary Fund (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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  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 East Asia

A region of Asia coextensive with the Far East.



East Asian adj. & n.
 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 An impoverished person who is supported at public expense; an indigent litigant who is permitted to sue or defend without paying costs; an impoverished criminal defendant who has a right to receive legal services without charge.


PAUPER.
 suggests that the Asian financial flu that began in Thailand in the summer and spread throughout Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east.  has now begun to spread in Northeast Asia Often used interchangeably with the term 'East Asia,' Northeast Asia is, as its name implies, in the geographic northeast region of Asia. Being a geographic, rather than a cultural term--as opposed to East Asia, which has varying definitions, some being cultural--Northeast Asia . South Korea's plummeting currency and mounting bad debts may reverberate re·ver·ber·ate  
v. re·ver·ber·at·ed, re·ver·ber·at·ing, re·ver·ber·ates

v.intr.
1. To resound in a succession of echoes; reecho.

2.
 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 ag·o·nize  
v. ag·o·nized, ag·o·niz·ing, ag·o·niz·es

v.intr.
1. To suffer extreme pain or great anguish.

2. To make a great effort; struggle.

v.tr.
 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)
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Date:Nov 22, 1997
Words:625
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