Editing Kim Dae-jung (section)

===Economic reforms and recovery===
As a presidential candidate, Kim briefly questioned the conditions attached to the IMF loans and suggested that he might renegotiate it. However, upon his election, Kim quickly recognized the importance of the IMF agreement in restoring South Korea's economic health.<ref>{{cite book|last1=Sharma|first1=Shalendra|title=The Asian financial crisis: Crisis, reform and recovery|date=2003|publisher=Manchester University Press|location=|isbn=|page=220}}</ref> Since then, he has implemented the most [[neoliberal]] policy among the major presidents of South Korea, leading to his nickname of "Neoliberal Revolutionist" ({{Korean|hangul=신자유주의 혁명가}}).<ref>{{cite news |url=https://www.hankookilbo.com/News/Read/201908181861331057 |script-title=ko:신자유주의 혁명가 김대중의 성공 그리고 한계 |work={{ill|SisaIN|ko|시사IN}} |date=24 August 2009 |access-date=18 December 2021}}</ref>

The first task of the Kim administration was restoring investor confidence. The administration held a series of intensive meetings with foreign creditors and quickly succeeded in rescheduling one-quarter of Korea's short-term liabilities.<ref name="lawcolumbia1">{{cite web|url=http://www2.law.columbia.edu/course_00S_L9436_001/2000/t20000224171437401618.htm|title = KoreaTimes : &#91;Reviewing President Kim's Two Years&#93; Building a New Economy}}</ref>

He vigorously pushed economic reform and restructuring recommended by the International Monetary Fund, in the process significantly altering the landscape of [[economy of South Korea|South Korean economy]]. He commenced the [[gold-collecting campaign]] in South Korea to overcome the debt to the [[International Monetary Fund]].<ref>{{Cite web |url=http://www.useoul.edu/news/news0101_view.jsp?idx=128898 |title=Archived copy |access-date=9 July 2019 |archive-date=9 July 2019 |archive-url=https://web.archive.org/web/20190709015758/http://www.useoul.edu/news/news0101_view.jsp%3Fidx%3D128898 |url-status=dead }}</ref><ref name="Britannica"/><ref>{{Cite journal |jstor = 23255888|title = Rok President Kim Dae-Jung's Keynote Address on the Korean Economy|journal = The Journal of East Asian Affairs|volume = 12|issue = 2|pages = 620–626|year = 1998}}</ref><ref>{{Cite book | url=https://books.google.com/books?id=Tq5YkPI3nPoC&q=Gold-collecting+campaign+KIM+DAE+JUNG&pg=PT34 |title = South Koreans in the Debt Crisis: The Creation of a Neoliberal Welfare Society|isbn = 978-0822390824|last1 = Song|first1 = Jesook|date = 18 August 2009| publisher=Duke University Press }}</ref>

Immediately after taking office, the Kim Dae-jung government pushed for revision of the Outside Auditor Law to facilitate the adoption of consolidated financial statements in accordance with international standards, beginning in 1999.<ref>{{cite book|last1=Sharma|first1=Shalendra|title=The Asian financial crisis: Crisis, reform and recovery|date=2003|publisher=Manchester University Press|location=|isbn=|page=232}}</ref>
Furthermore, as cross-guarantees allowed loss-making affiliates and subsidiaries with chaebol groups to continue to borrow from banks and drain financial resources from healthier firms, on 1 April 1998, the government prohibited any new intra-chaebol mutual payment guarantees and ordered the phasing-out of the existing guarantees by March 2000. Banks were directed
to negotiate financial restructuring agreements with chaebol groups to reduce any outstanding debts, including closing insolvent firms. With the government's commitment to introduce internationally accepted accounting practices, including independent external audits, full disclosure, and consolidated statements by conglomerates, the Kim administration helped to improve the transparency of chaebol corporate balance-sheets and governance and bring Korea's economy to greater integration with the global economy.

The government also adopted a proactive foreign investment policy. Scores of banks were closed, merged or taken over by the government, and surviving banks were recapitalized. The chaebol were pressured to lower their perilously high debt-equity ratios and establish greater corporate transparency and accountability. Foreign direct investment, under Kim, was viewed as vital to the financial and corporate reform process as a form of secure, stable and long-term form of investment, and also able to acquire new technologies and managerial practices.<ref name="lawcolumbia1"/>

Kim's administration did not shy away from using strong-arm tactics to bring about desired results. For example, when [[LG Group]] objected to [[Hyundai Group|Hyundai]] taking the controlling share and decided to pull out in the midst of merger negotiations, the newly created [[Financial Services Commission (South Korea)|Financial Supervisory Commission]] (FSC) immediately called in LG Group's creditors to discuss punitive measures, including immediate suspension of credit and recall of existing loans and threatened to conduct a tax probe. In the end, LG Group agreed to the merger, relinquishing management control and selling its semiconductor business to Hyundai. Similarly, Samsung was encouraged to sell its automotive operations to Daewoo.<ref>{{cite book|last1=Sharma|first1=Shalendra|title=The Asian financial crisis: Crisis, reform and recovery|date=2003|publisher=Manchester University Press|location=|isbn=|page=233}}</ref>

The reforms were modestly successful in getting the chaebols to change their ownership structure by separating ownership from management. Therefore, the largest changes made in this period were reforms in chaebol corporate governance through consolidated financial statements, independent external audits and reduction of intra-group mutual payment guarantees.

Chaebols also streamlined their operations by reducing their excessive leverage and consolidating their many operations in a few core competencies. Some also reduced their debt burden and increased their profitability.<ref>{{cite book|last1=Sharma|first1=Shalendra|title=The Asian financial crisis: Crisis, reform and recovery|date=2003|publisher=Manchester University Press|location=|isbn=|page=234}}</ref> After the economy shrank by 5.8 percent in 1998, it grew 10.2 percent in 1999, marking an impressive recovery.<ref name="reconcilation">{{cite news|url=http://archives.cnn.com/2001/WORLD/asiapcf/east/06/12/bio.kim.daejung/ |title=Kim Dae-jung: Dedicated to reconciliation |date=14 June 2001 |publisher=CNN |access-date=22 September 2006 |url-status=dead |archive-url=https://web.archive.org/web/20060922050400/http://archives.cnn.com/2001/WORLD/asiapcf/east/06/12/bio.kim.daejung/ |archive-date=22 September 2006 }}</ref> South Korea repaid the IMF loan in August 2001, 3 years ahead of schedule.<ref>{{cite news|script-title=ko:[현장기자] DJ，영욕의 5년|url=https://news.naver.com/main/read.naver?mode=LSD&mid=sec&sid1=110&oid=005&aid=0000138785|access-date=30 October 2021|work=[[Naver]]|date=24 February 2003}}</ref>

Exports also recovered, led by exporting of semiconductors, automobiles, liquid crystal displays and mobile phones.<ref name="lawcolumbia1"/> Foreign investment during 1998 and 1999 exceeded that of the cumulative total for the previous 40 years. Foreign exchange reserves went from a perilously low $3.9&nbsp;billion in December 1997 to $74.0&nbsp;billion at the end of 1999, nearly double Korea's short-term external liabilities.<ref name="lawcolumbia1"/> The exchange rate strengthened quickly by 30% against the U.S. dollar,<ref>{{cite book|last1=Sharma|first1=Shalendra|title=The Asian financial crisis: Crisis, reform and recovery|date=2003|publisher=Manchester University Press|location=|isbn=|page=229}}</ref> to the point of actually causing concern about eroding Korea's international competitiveness, and unemployment fell.

Despite worries of a second economic crisis in the wake of [[Daewoo]]'s bankruptcy in July 1999 (after its chairman, [[Kim Woo-choong]] continued to raise the company's indebtedness and aggressively expand in spite of government restructuring and aid), the economic recovery remained on track. By also deciding not to bail out Daewoo, Kim's government conveyed a message to chaebols that no company was [[too big to fail]].

The administration also amended the bankruptcy laws, simplifying legal proceedings for corporate rehabilitation and filing of bankruptcy and streamlining provisions for non-viable firms to exit markets.<ref>{{cite book|last1=Sharma|first1=Shalendra|title=The Asian financial crisis: Crisis, reform and recovery|date=2003|publisher=Manchester University Press|location=|isbn=|page=236}}</ref>