Yangkyoon Byeon, Kwanghae Choi, Heenam Choi, and Jun I. Kim
Korea is facing mounting economic challenges. Productivity growth has been on a trend decline amid demographic headwinds, while the societal demand for inclusive growth has been on a steep rise. Furthermore, the government-led unbalanced growth model—which served Korea well in the past—has become less effective and politically palatable in recent years. As such, Korea needs a major paradigm shift to embark on a new sustainable and inclusive growth path. But policy response has been modest at best with no major reforms being implemented over the past two decades. We propose a paradigm shift in Korea’s economic framework, involving a simultaneous big push for greater economic freedom and stronger social protection within the parameters set by long-run fiscal sustainability. We also provide a detailed account of structural reforms to boost economic freedom and sustainable funding plans for stronger social protection.
International Monetary Fund. External Relations Dept.
On March 21, Masood Ahmed, Deputy Director of the IMF’s Policy Development and Review Department, briefed the press on the organization’s work to streamline the conditions attached to the use of IMF resources (“conditionality”). At the behest of IMF Managing Director Horst Köhler, staff reviewed the experience with conditionality and sought ways to sharpen its focus and enhance country ownership ofprograms.
As part of its conditionality review, the IMF has organized a series of discussions on its proposals, holding seminars in Berlin in June (see IMF Survey, July 2, page 218) and in Tokyo in July (see IMF Survey, July 30, page 249). A third forum—cosponsored by the Commonwealth Secretariat, the World Bank, and the IMF and held in London on July 23-24—covered issues related to conditionality and ownership particularly relevant to low-income countries. The seminar was co-chaired by Winston Cox, Commonwealth Deputy Secretary-General; Masood Ahmed, Deputy Director of the IMF’s Policy Development and Review Department; and Joanne Salop, Vice-President for the World Bank’s Operations Policy and Country Services. It brought together representatives of borrowing and creditor countries, international organizations, nongovernmental organizations (NGOs), and a number of other individuals with relevant expertise and experience.