US Watches Use of IMF Funds
09/18 17:41
The U.S. administration has been monitoring whether rescue loans provided by the International Monetary Fund are being used to subsidize Korea's ailing key industries, a U.S.-based lawyer stated in a newspaper article yesterday.
Kim Sok-han, a lawyer of Korean descent, said in his article published in Dong-A Ilbo that the U.S. government has been operating a special task force since July to see if Korea is adhering to the bailout terms associated with the IMF's $58-billion rescue package.
The task force, comprised of officials from the Trade Representative Office and the Departments of Treasury, Commerce and State, has an incentive to make such a probe since Korean companies are in competition with American enterprises.
Kim insisted that the task force was established under pressure from the U.S. Congress and from American firms competing with Korean enterprises.''At present, the task force is confining its function to monitoring Korea's semiconductor makers, but the probe could spread to the auto and steel industries,'' he said.
With respect to Kim's argument, the Ministry of Finance and Economy said all of the disbursements from the IMF had been used to replenish the country's foreign exchange reserves thus far. ''We have no idea of whether there is such a task force in the U.S. administration. However, due to our agreement with the IMF, there is no possibility of a misuse of funds,'' said an MOFE official.
He said the IMF makes it a rule to inspect how the provided loans are used. Since an agreement was reached on the $58-billion rescue package in early December, the IMF has disbursed $18 billion to Korea thus far. The World Bank, which pledged $10 billion to the package, has provided $5 billion and the Asian Development Bank has offered $3 billion out of the $4 billion it's committed.
''Loans from the World Bank and the ADB can be used to finance financial sector restructuring, but it is questionable as to whether this should be seen as indirect aid for the corporate sector,'' the official said.
According to press reports, many American companies have deep-rooted doubts about Korea's honesty in its distribution of funds.
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