This subject scares the heck out of me!

[Urban Ranger]

And all those worker strikes in SK, are those a result of the government trying to apply more IMF advice?

[Caligastia]

Im getting sick of this IMF threadjack!

[Q Classic]

UR: most of those strikes, actually, are not so much because of the IMF advice.

the Daewoo strikes were simply because they didn't want to be sold to GM. the banking strikes were mostly because they didn't want to merge bank a with bank b and lose their jobs.

i guess, if you wanted to, you could pin the blame on the IMF. but by that token, you could then blame the thais or the americans for the sk economic near-meltdown in '97. which is not the case.

besides, UR, strikes have been common in korea. labor, although frowned upon, is strong there, particularly in the heavy industry sector. p'ohang and ulsan tend to be the hotbeds of labor-- and it's to be expected, most car manufacturing takes place in ulsan, and posco is based out of p'ohang.

[Goingonit]

Originally posted by Kublai-Khan
The IMF recommended the government to cut the salaries 13%, they did it, they recommended the government to increase taxes, they did it.
The objective was to reduce the deficit to two thirds of it.
All this was recommended in 1999, when the Argentinean economy was recovering from the South East Asia, Russian crisis 1997-1998.
The economy was growing in 1999, the recession started when receipes of the IMF were applied.
With the recession the deficit became even higher, because there was less economical activity, and so on less money in taxes were payd to the state.

Argentina never had a big debt (more than 3 billions) until the the military coup of the late 70s early 80s.
In 1983 when democracy returned we had a debt of 45 billions mostly military expence.
12 billions of the budget, (40 billions) are to pay the debt.And all the new credits the government received were to pay the debt, not to finance my education or something.
Without the debt, the argentinean budget has superavit.

It wasn't IMF advice that killed Argentina so much as low productivity and an overvalued currency.

[Colon™]

You guys are overlooking something about using commodities as currency, namely that the value rises and falls with the commodity’s supply and demand. For instance, in the 19th century many countries (like Japan) used the silver standard, as opposed to the gold standard. When huge silver deposits were discovered in Mexico the value of silver fell accordingly, causing the currencies of silver standard block to depreciate vs the gold standard block, completely bypassing the state of their trade balance.
Another problem was that the industrial world was suffering from deflation much of the 19th century, as the economy was growing strongly while money supply (at least in the gold standard block) was stagnant.

They were doing quite well before, also. They got that way by following an economic policy completely opposite of what the IMF orders, heavy government involvement in the economy. Since the monetary collapse, one can't really say they're doing as well as they used to do, but at least they aren't collapsing.

They were doing quite well before in the sense they were living in the lalaland of the bubble. Not the quite well you want IMHO.

Heavy govt involvement in restructuring industry and finances, to improve the market’s functioning, yes. South Korea had been suffering from massive misallocation of capital, in which billions were lend to conglomerates such Daewoo and Hyundai to expand regardless of return on investment. The govt pressured them to reform and hive off unprofitable parts. The govt also stopped directing bank loans towards the conglomerates and cleaned up the banks’ balance sheets, by purchasing their bad debts. Market forces now play a bigger role in SK banking industry, not a smaller one, and the banks now lend more to smaller companies and consumers. Those reforms were pretty much the essence of IMF’s demands.

SK’s economy grew almost 11% in ‘99, over 9% in ‘00 and 3% in ‘01, supported initially by exports to the US and by domestic consumers later on. (govt expenditures grew less than 1% annually) Of all countries hit hard by the financial crisis in 98, SK reformed its economy most forcefully along the lines of IMF’s advice and of all these countries, SK's economy is most healthy and growing strongest.

[DanS]

In the case of SK, the IMF helped immediately. IIRC, SK had a monetary reserves crisis, which was covered by the IMF. The extreme capital flight was arrested by action backed by the IMF.

[Shi Huangdi]

Seeking IMF aid is optional. Nobody is forced to accept IMF aid if they don't want it. Those who voluntarily accept something have no cause to ***** about later. It particularly smacks of ingratitude when they accuse the people who freely grant them money of Greed.

[Q Classic]

let's get one thing straight. SK isn't ungrateful for IMF help, as far as i can tell. they needed it right then, they got it, and it got fixed. the money was required to beef up foreign reserves. once it was unneeded, so to speak, korea paid it off in its entirety. and completely.

the thing is, while some korean companies have been able to make changes and cut debts, others have not. that's why you got Daewoo dying like that, and Hynix in danger of pretty much getting wiped out (although Hynix was spun off so the rest of Hyundai could survive, and also allow Hyundai Semiconductor to try to survive as well)

[Colon™]

Originally posted by Q Cubed

the thing is, while some korean companies have been able to make changes and cut debts, others have not. that's why you got Daewoo dying like that, and Hynix in danger of pretty much getting wiped out (although Hynix was spun off so the rest of Hyundai could survive, and also allow Hyundai Semiconductor to try to survive as well)

I think it’s a shame Daewoo went down but that’s capitalism. Better to shut down or sell off than allowing such conglomerates to limp on in a zombie-condition, swallowing capital for its survival that could have been put to good use. Just look at Japan if you want to know how pointless this is.

[Q Classic]

doesn't matter to me. i never liked Daewoo anyway.

but that's precisely what was wrong with the korean chaebol, pre-1997. Daewoo was the prime example, as well as the largest for some of it-- having many government boons, it sunk billions and billions into stupid and ill-advised divisions. after the crisis, itwas realized that a lot of the unprofitable ones would have to be eliminated-- so while some (the ones that still remain today) followed common sense, the bad ones didn't.

[Urban Ranger]

Colon,

There is a problem with measuring everything in return of investment. If you sink a billion dollars in basic R&D, there is absolutely no guarantee you'll get anything back. Even product development is iffy. Put a billion towards improving safety conditions and you definitely will not see any return on that. Put a billion in network security, you won't get anything tangable back.

[DanS]

"There is a problem with measuring everything in return of investment."

Uh... Erm... You mean in a private enterprise, ROI is not king? How the hell else would you run a business?

Colon: It's amazing that Japan doesn't have a huge crisis on its hands. The complacency is striking.

[Colon™]

Q Cubed, I agree.

UR, that you can't be certain about the rate of return you'll receive is not an excuse for sinking billions in obviously ill-fated projects and zombie corporations.

Dan, reply on my mail and I'll reply on your post.

[DanS]

I adamantly refuse to be pressured like this.

[Serb]

Just stop this bullsh!t,. Ok?
IMF must die, it’s clear for everyone, even for Mr. Floyd.