While the recovery and reform of the Korean economy has been impressive, it also remains true that there are still many things left undone. Many of the nationalized banks, as a result of a massive infusion of public funds, are heavily burdened with bad assets and will have to be restructured again. Daewoo Group debts will further weaken banks, while the problem of investment trust companies, which were papered-over temporarily, still begs for an ultimate solution. Audit by outside directors of corporations and measures to better protect shareholder rights need more improvement. Major privatization efforts are experiencing delay at the protest of interest groups.
Labor seems to be stirring again after a couple of years of relative tranquility.
Many experts in and out of the government admit that the economic recovery after the shock of the financial crisis in late 1997 is not a result of reforms that improved the Korean economy's competitiveness but rather a fortunate consequence of cyclical fluctuations, including the record-breaking boom of the U.S. economy. The Korean economy will have to face some stiff challenges in the year 2000, economists predict. Wage increases are beginning to surpass the consumer price rise and will result in further price hikes and and the loss of competitiveness, which could again trigger labor tension. Pressure is increasing for the wage hikes as the parliamentary election approaches. The outlook for a continued trade surplus is not necessarily optimistic if the present trend of the import growth rate outgrowing that of the export rate continues unabated.