The IMF has a standard prescription for countries in financial trouble, and it's a very controversial one, even among mainstream economists. In exchange for loaning massive sums to South Korea, Thailand, Indonesia, and the Philippines, the IMF imposed stiff conditions aimed at forcing these countries to reshape their economies to be able to pay off their primary debt and the IMF loan. The idea is to force the country to shift resources away from domestic use and toward the servicing of foreign creditors and markets. Interest rates are held high, producing a cruel recession. The recession reduces demand for imports, forces down wages, and makes exports the most attractive outlet for industrial capacity.
Money earned from exports then is recycled to pay foreign bankers and bondholders.
A key part of the prescription is to turn trade deficits into surpluses by increasing exports and decreasing imports. The IMF's standard plan usually causes a drastic drop in employment, cut wages, and social unrest in the countries receiving its loans. Economic observer Doug Henwood notes that this time around, the IMF is doing even more reengineering than usual. Mainstream economists admit that IMF austerity will probably cost Korea a million jobs this year. They really want to redo the whole class structure in those countries.