How Did The Imf Affect South Korea

Before going into detail about the IMF's impact on South Korea, I figure I give you a brief background on the IMF and its beginning. After World War 2, in the summer of 1944, representatives from around the world gathered to form a foundation for international financial order. Included in the representatives were the United States, Russia, France, Great Britain and 40 other countries. These representatives were in hopes that a new system would prevent a financial crisis, such as the great depression, as well as another World War. As a result of the gathering, the International Monetary Fund, also known as the IMF and the World Bank was created to rebuild post-war economies and prevent economic crises. The IMF would be responsible for establishing secure monetary policy and exchange rate regimes, which in turn will help stabilize global financial markets. The World Bank would be responsible for rebuilding areas affected by war by investing in reconstruction. Though the IMF and World Bank were created for good, they are resented …show more content…
Several years prior to 1997, Korea was enjoying a boom in its economy due to the hard work of its people and the increase of trade. In 1997 South Korea started to experience a decline in trade such as computer chips and other technological products. This decline is due to several factors. One of the factors includes bankruptcies of several major local companies. Another one of these factors includes the decline of a neighboring country, Japan. Japan's decline in its own country affected South Korea's export trade. The result of less production and trade, in turn, lowered South Korean Money. These factors combined caused a downward spiral that is known as the South Korean Crisis. To alleviate the financial crisis that South Korea is now facing, the IMF steps in along with other financial institution to put together a multi-billion dollar bailout