Republic of Korea and the IMF
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"I am delighted to have the opportunity to visit Korea for the first time since my appointment as Managing Director of the IMF. I have arrived on an historic occasion, for it was 50 years ago, almost to the day—on August 26, 1955—that Korea first became a member of the International Monetary Fund. Over these past fifty years, the country has made astounding progress in raising per capita incomes and moving into the ranks of the advanced nations, thanks to the efforts of the Korean people. And throughout this period, the IMF and Korea have maintained close relations, working together to advance the nation.
"My visit to Korea has given me an opportunity to see firsthand Korea's remarkable economic progress and to discuss the country's current challenges currently facing Korea with the country's leadership. Today, I had the privilege of meeting President Roh Moo-Hyun who shared his vision and goals for a prosperous Korea. I also had fruitful discussions with Deputy Prime Minister Han Duck-Soo and Bank of Korea Governor Park Seung as well as key academic leaders.
"The Korean economy is on the road to recovery. After two years of adjustment following the credit card crisis, households are now beginning to increase their spending, helping to drive the recovery. As a result, we expect growth to reach around 4 percent this year and then to accelerate to 5 percent in 2006.
"In my discussions with the authorities, we focused on the policies needed to sustain rapid growth in Korea. With the recovery still in its early stages, we agreed that macroeconomic policies should remain supportive. I also commended the authorities for adhering to their flexible exchange rate policy which has provided needed support to domestic demand.
"We also agreed that to ensure that this recovery is vigorous and sustainable, further progress in structural reforms is needed. In particular, priority should be given to enhancing the flexibility of the labor market to spur investment and the creation of high-quality jobs. This would require reducing the high protection for regular workers while strengthening the social safety net for the most vulnerable.
"In conclusion, my visit to Seoul has left me with the strong impression that with continued progress in reform, Korea's future economic prospects remain bright. Korea has come a long way over the past fifty years. We at the IMF expect that the next fifty years will be even better, and we look forward to our continuing and deepening our close cooperation in the years to come."
IMF EXTERNAL RELATIONS DEPARTMENT