Seoul Pledges $15 Billion to the IMF
In the late 1980s, South Korea faced sovereign default. The things you read about Greece? Korea was in virtually the same situation. It received enormous international financial assistance, in the form of loans from the International Monetary Fund (IMF). In Korea, this was called IMF시대 (please don’t say “HEY! Just like 소녀시대). Controversy ensued, but Korea paid back the loans, with interest, and in advance. It was an era of austerity for Korea and the Korean economy. One dollar bought 2,100 Korean Won at the time.
How Things Have Changed
This week, the IMF doubled the size of its reserves. Why? Europe, virtually the entire continent (except Germany and Great Britain), is being engulfed by debt that it cannot handle. Hat in hand, IMF President Lagarde, an elegant Frenchwoman, has secured pledges from the international community. Not surprisingly, the IMF has turned to Asia. One of the donors? South Korea, to the tune of $15 Billion. So while struggles continue for everyday Koreans, and the stress level is high, the correct context is that Korea has come very, very far in a remarkably short period of time. This seemingly small headline is just a simple reminder of that incontrovertible fact.