“Korea, Blind Faith in the U.S. and the IMF Is Dangerous”

Chalmers Johnson (photo), U.S. expert on Asian matters, warned that Korea could be in danger of repeating its own near-meltdown unless Korea resists the `Washington consensus` that the U.S. and International Monetary Fund (IMF) called for opening a capital market.

Johnson indicated through his writing in the L.A. Times on the 27th that Korea`s disaster, as well as the financial crises of the Mexico, Indonesia, Thailand, Brazil, Russia, and Argentina, all occurred while these countries were dutifully following the Anglo-American economic model.

Johnson said that the Anglo-American economic model propounded by the U.S. Treasury and its puppet IMF calls for opening foreign countries to international capital while cutting back on wages, safety nets and services to ordinary citizens.

Johnson said, "Presently the South Korean economy is growing better than most economies world wide, based on domestic sales and exports to China. But some market analysts in Seoul, blinded by the Washington consensus, want Korean firms to adhere more closely to U.S. standards in corporate governance."

Johnson emphasized that Korea needs to develop its own economic model for its particular problems saying, "If Korea follows this advice, it will most likely be overcome by economic chaos."

As a substitute for the Korean economic model, he suggested that Korea needs to △ensure its ability to compete with China over the long haul, △ innovate products in high tech and engineering, and △ become proficient in advanced services including architecture, medical education, business planning, housing, fashion and entertainment.

And he insisted that Korea needs an economic planning body that will produce a strategy, and not simply please the economic fanatics of the IMF.

Michel Camdessus, former managing director of the IMF (resigned in 1999), charged that Korea`s 1997 economic crisis was caused by `crony capitalism` which means the close collaboration between government, banks and big business to achieve national economic goals and maintain high employment. But considering U.S. Enron`s bankruptcy, political contributions, and collusion with its accounting firm, U.S. standard of business management can be called `organized crime` rather than `crony capitalism`.

Johnson was a politics professor at UCLA and the chief of Japanese Policy Research Institute, a U.S. think tank, and is the author of `Blowback: The Costs and Consequences of American Empire`.