Some even concluded that the crisis had been largely a cyclical event and that the need for painful structural reform had been exaggerated. The result was a tendency to slow the process of structural and regulatory reform. Moreover, there were changes in the external environment which had been so favorable to Korea in 1999 and the first months of 2000. Then, the prices of Korea's major imports, oil for example, were moderate, while the prices of many of Korea's exports, such as semi-conductors, were high. That situation has changed.
Oil prices are high, and semi-conductor prices seem to be softening.
Economic growth in some of Korea's major export markets, the United States in particular, may be slowing. Global equity markets have sagged with an inevitable effect on the Korean market and the ability of Korean companies to raise funds through new issues. Finally, global interest rates have tightened. So, any complacency about the economy and the need for further reform would clearly be misplaced. Fortunately, the Korean Government has recognized the need to step up the restructuring process.