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The death of Korea Inc

Revolutionary changes are afoot in South Korea. Spurred on by recent scandals, it is poised to scrap state control of the economy and introduce a true free market. But foreigners still find it tough. Maggie Ford reports.

Imagine the embarrassment. Just weeks after Korea had been accepted into the rich man's club of OECD nations it suffered the collapse of two large corporations with debts of more than $6 billion, a banking crisis, an outbreak of labour unrest which brought the country to a standstill and a corruption scandal which spread across the political spectrum from the president's family down.

Added to its ballooning foreign debt, falling exports, a massive current account deficit, a depreciating currency and a failing stock market, analysts were quick to say this ambitious country was a busted flush - too big for its boots, living beyond its means, still too protectionist and xenophobic to be welcomed as a serious player among big economies.

But the sceptics - and there are many - may have spoken too soon, for there is nothing like a crisis to galvanize the Koreans into action.

"In the past, the government used to manage the economy," says Kim Choong Soo, who negotiated OECD entry and is top adviser to Kang Kyong Shik, deputy prime minister and minister for finance and the economy. "Now we're going to stop interfering. This crisis has made us aware of our limitations in the era of globalization.

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