On the eve of the tenth anniversary of its democratization, Korea was hit by an unprecedented financial crisis marked by massive capital outflows, a sharp depreciation of the won and severe distress in the corporate and financial sectors. Korea's anniversary gift from the interntional community was an IMF conditionality program that imposed a comprehensive package of neoliberal economic reforms. Compared with the South American and East European experiences, economic reform in Korea has been implemented without significant policy obstructions, political instability or social disruptions. Despite much skepticism, the backbreaking reforms quickly began to pay off. The reforms created a V-shaped (rather than U-shaped) pattern of recovery, though more determined financial and corporate restructuring is needed in order for the nation to achieve sustainable growth. And, the quality of democracy has not deteriorated because of conflicts resulting from the economic reform program (neither, however, has it improved).

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