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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (1288)	1/20/1998 2:55:00 PM
From: Worswick	Respond to of 9980

For private use. Top Stories from the Front Page of the International Herald Tribune, Monday, January 19, 1998 Kim Warns Koreans of Pain Ahead 'Trust Me' on Sacrifices, President-Elect Pleads By Don Kirk International Herald Tribune -------------------------------------------------------------------------------- SEOUL - President-elect Kim Dae Jung warned South Koreans on Sunday that they will face ''terrible hardships'' to rebuild the country's economy and urged the nation to accept layoffs and other sacrifices. ''If we do well this year, we will be able to get out of this crisis from the middle of next year,'' Mr. Kim said in a televised meeting with a sampling of his constituency. ''Please trust me,'' he said, his voice heavy with emotion. ''Just trust me, I know I can do it, just trust me.'' He spoke as a delegation of his top economic advisers was flying to New York for critical talks with creditor banks on rolling over more than $25 billion in debts. The two-hour ''conversation with citizens'' was broadcast live on the nation's four television networks and watched in freezing temperatures by crowds in front of big-screen television sets at Seoul's central railroad station and in public squares in other large cities. It was Mr. Kim's first major public appearance before his people since he won the presidential election Dec. 18 with barely 40 percent of the vote. ''We're just entering a dark IMF tunnel,'' he said, referring to the conditions attached to the $60 billion loan-guarantee package Seoul has accepted from the International Monetary Fund. ''The real ordeal will begin from now on.'' South Korea is entering a ''year of harsh trials,'' Mr. Kim said, in which as many as one million people might be laid off and inflation could exceed 10 percent. The IMF has demanded cuts in company work forces, saying they are crucial to persuading foreign lenders to roll over the $92 billion in loans due within a year. The 800 or so people in the Korean Broadcasting System studio in Seoul laughed, joked, applauded - and listened with rapt attention as the president-elect fielded questions from seven panelists, the studio audience and a few people in the street. Asked by a businessman in the audience if South Korea's economy might collapse, Mr. Kim said, ''Not in a year but in a few days the country can go bankrupt unless we cope with the situation.'' A onetime dissident who ran unsuccessfully for president three times before his victory, Mr. Kim reminded his audience, ''I have prepared for the presidency for many years.'' Mr. Kim, who takes office Feb. 25, told South Koreans that the purpose of the mission to New York was ''to save the economy.'' Officials in Seoul said the meetings, which begin Wednesday, will focus on a formula to repackage about $35 billion worth of short-term debts as state-guaranteed bonds. The 12-person delegation hopes to persuade a group of banks led by J.P. Morgan & Co. to compromise on demands for converting the debts into government bonds at interest rates ranging from 11 percent to 13 percent. Arguing that the economy is ''showing signs of recovery,'' the leader of the delegation, Kim Yong Hwan, remarked to reporters before taking off, ''There is no need to stick to high interest rates.'' The delegation opposes converting bank debts to government bonds but may yield if the banks agree to the ''call option'' under which the rates would go down if Seoul's bond ratings improved from their ''junk'' status. Delegation members have said that, if nothing else, they would prefer that Seoul ''guarantee'' private debts rather than issue bonds to cover them.