Korea On Verge Of Recovery - Without Use Of Loan

  • Dr Lockwood Smith
International Trade

Korea's reforms have put it on the verge of economic recovery without recourse to New Zealand's US$100 million loan offer, Trade Minister Lockwood Smith said today.

Dr Smith was commenting before departing today for a three day visit to the key APEC economy to demonstrate New Zealand's admiration of its commitment to reform and to encourage it to stay the course.

He will meet with key ministers to discuss the reform programme, bilateral trade issues, June's meeting of APEC Trade Ministers in Auckland and the growing prospect of a new comprehensive trade Round.

"Korea has gone through difficult times but it has now managed to stabilise its economy and there is growing confidence it will begin to recover next year," Dr Smith said.

"The relative speed of its recovery is directly linked to its commitment to reform. It is all the more notable given that it has managed to stabilise its economy without having to resort to any of the funds pledged by other economies to back up the IMF's loan package."

Dr Smith said he would be seeking the views of Korean Ministers and other contacts on the way ahead for their economy. Korea's size and influence meant it was critical it stayed on course both for its benefit and to restore confidence to the region.

Dr Smith said that despite the Asian Economic Crisis, Korea remained New Zealand's fifth largest export market and an important long-term trade partner. While New Zealand exports to Korea initially plunged in the wake of the crisis, the latest trade statistics suggest our exports in September 1998 were up 10% compared with September 1997.

New Zealand's main exports to Korea are logs and unwrought aluminium, but we also earn substantial amounts from raw sheep and lamb skins, acyclic alcohols, chemical wood pulp, casein, frozen beef, grading machinery, cheese and curd, and timber. New Zealand's velvet industry is also heavily dependent on Korea, while our cherry industry is seeking access for this season.

While in Korea, Dr Smith will meet with Foreign Minister Hong Soon-young, Finance Minister Lee Kyu-sung, Agriculture Minister Kim Sung-hoon and Health & Welfare Minister Kim Mo-im. He will also meet Korean importers of New Zealand products, the Korea/New Zealand Business Council, key academics and think-tanks, and visit Daewoo Motors' assembly plant in Inchon City.