[Congressional Record (Bound Edition), Volume 145 (1999), Part 2]
[Extensions of Remarks]
[Page 2359]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              IMF FUNDING

                                 ______
                                 

                          HON. JOHN P. MURTHA

                            of pennsylvania

                    in the house of representatives

                      Thursday, February 11, 1999

  Mr. MURTHA. Mr. Speaker, I recently received the following statement 
by the Korea-U.S. Business Councils from U.S. Council members Dave 
Roderick and Tom Usher. It's encouraging and shows the difference IMF 
funds can make in the international economic community. I'm pleased to 
include the statement in the Congressional Record.

 Korea-U.S./U.S.-Korea Business Councils Joint Statement, January 19, 
                                  1999

       The Korea-U.S. Business Council and the U.S.-Korea Business 
     Council, representing business leaders from their respective 
     countries, had their Twelfth Annual Joint Steering Committee 
     Meeting in Hawaii, January 17-19, 1999.
       The U.S. Council Members have a general feeling that the 
     Korean government, under the strong leadership of President 
     Kim Dae-Jung, has adopted a rational and constructive policy 
     to overcome the financial crisis.
       Only a year after South Korea had to ask for assistance 
     from the International Monetary Fund:
       Interest rates have fallen to single digits after reaching 
     almost 30% during the height of the crisis because of 
     improved liquidity.
       Korea's stock market index continues to dramatically rise 
     as a result of active purchasers from domestic and foreign 
     investors; and,
       Stabilization to the exchange rate has been achieved.
       As a result of the combined vigorous efforts by the Korean 
     government, with the continuing support of the U.S. and the 
     IMF, and the private sector in pursuing financial reform, 
     corporate restructuring and improved corporate governance, 
     the South Korean economy is now beginning to show some signs 
     of recovery.
       Korea's foreign exchange reserves have surpassed the $48 
     billion mark for the first time in the nation's history.
       Korea's five largest ``chaebols'' have agreed to 
     drastically reduce the number of subsidiaries and their debt-
     to-equity ratios and also complete ``Big Deals'' that will 
     greatly help to enhance the competitiveness of Korean 
     industries.
       Recently, the sovereign rating of won-denominated Korean 
     government bonds has been upgraded and further upgrades are 
     expected in the future.
       The Korean government has begun to pay back loans to the 
     IMF instead of exercising the option to roll-over the loans.
       Despite the good news, both Councils are greatly concerned 
     about the dramatic increase in unemployment figures in Korea 
     and how this could negatively affect social stability. 
     Existing ``safety net'' programs should be expanded to ensure 
     continued support for more painful reforms.
       Another area of concern for both Councils is the highly 
     unpredictable relationship with North Korea. After being 
     fully updated on the current situation, both sides agreed 
     that stability between the North and the South must be 
     ensured and that a strong united front must be maintained to 
     serve as a deterrent against North Korea.
       The Korean Council would like to acknowledge the important 
     role played by the U.S. government and American companies in 
     helping South Korea during the financial crisis. Based on the 
     U.S.'s experience in dealing with their own economic 
     difficulties during the late 1980s, the Korean Council asks 
     the U.S. to offer continued advice and assistance.
       This will be a difficult year because many agreements will 
     have to be reached concerning trade issues affecting the U.S. 
     and South Korea. Both Councils would like to offer their 
     support and contributions to ensure that the completion of 
     this process is beneficial and amicable to both nations.
       Both Councils noted the progress being made by the two 
     governments toward concluding a Bi-lateral Investment Treaty 
     (BIT) and give their strong endorsement for its rapid 
     implementation. A U.S.-ROK``BIT'' can make a significant 
     contribution to the business relationship and help in 
     restoring Korea's economy.
       The U.S. side urges that efforts continue to liberalize the 
     economy, further encourage foreign direct investment, 
     increase transparency in financial statements, improve 
     corporate governance, and maintain commitments to open, fair 
     and non-discriminatory trade rules.
       Although many positive things have been accomplished in a 
     very short period of time, both Councils are cognizant of the 
     fact that there is still much work left to be done. 
     Accordingly, both councils would like to offer their full 
     support for these efforts and urge all parties to remain 
     diligent to provide the setting for eventual recovery and 
     continued prosperity.

     

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