IMF Forces Massive Corporate Restructuring in South Korea

The International Monetary Fund implements a 7 billion bailout package for South Korea, mandating sweeping economic reforms. This included forced corporate restructuring of the chaebol system, financial sector liberalization, and opening markets to foreign investors. The conditions resulted in liquidating insolvent banks, breaking up corporate conglomerates, and fundamentally transforming South Korea’s economic structure through neoliberal policy interventions. The crisis exposed the deep structural weaknesses in South Korea’s economic model, with the IMF requiring comprehensive reforms: banks were consolidated, chaebols were forced to reduce debt-to-equity ratios from over 300% to around 172.9%, and eight of the top thirty chaebols were bankrupted, leading to significant economic restructuring.