Magazine article Business Asia

Korea Takes Tough Options

Magazine article Business Asia

Korea Takes Tough Options

Article excerpt

Analysts predict Seoul will lead Asia's revival

Consumer demand is rising in South Korea as analysts -- most notably United States Federal Reserve chairman Mr Alan Greenspan -- predict Korea will lead Asia's economic recovery.

Often resistant to change, Korea has been forced to overhaul its finance, labour, foreign investment and corporate governance sectors because of Asia's economic crisis. The dividends seem to be emerging.

In a recent speech, Mr Greenspan said Korea's economy was showing the most progress in Asia. Indonesia and Hong Kong were just bottoming out, he said, while Malaysia and Thailand were showing mild signs of revival.

Other hopeful signs exist.

A new report by the East Asia Analytical Unit (EAAU) at Australia's Department of Foreign Affairs and Trade suggests Korea's economy will strengthen considerably in 1999 and 2000.

Titled "Korea Rebuilds: From Crisis to Opportunity", the report notes that the KOPSI stock market index reached pre-crisis levels in April, foreign exchange reserves are now able to cover four months of imports and exports increased by 2.8 per cent in the March quarter. Korea's currency, the won, has also stabilised.

In its latest forecast, the International Monetary Fund predicted 2 per cent gross domestic product (GDP) growth in Korea this year and 4.6 per cent in 2000. The Bank of Korea has upgraded its 1999 GDP growth expectation to 3.8 per cent from 3.2 per cent.

Korean Minister for Commerce, Trade and Energy Mr Park Tae Young said the reforms held short- and long-term benefits for foreign investors. …

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