Cloud Over S. Korea Election

South Koreans will go to the polls Thursday far more worried about their economic security than who their next president will be, and little that the two major candidates are saying has eased that fear. Neither Kim Dae Jung, the longtime opposition leader, nor Lee Hoi Chang, a former administration figure, has outlined anything like a coherent response to the economic disaster shaking the country. Last week outgoing President Kim Young Sam was able to cajole the front-runners into accepting the tough conditions set by the International Monetary Fund for a $60-billion bailout package. But the crisis that brought in the IMF is just a symptom of a deep systemic illness. Curative surgery, and not just palliative first aid, is going to be needed.

The economic miracle that made South Korea the world’s 11th-richest nation owed much to a form of state-led capitalism that had government instructing banks where to lend and directing industry where to invest. But that approach is now irrelevant and harmful, U.S. officials have long noted. The cozy ties developed among government, lending institutions and the giant conglomerates known as chaebol encouraged corruption, irrational expansionism and structural inefficiencies. Protectionism limited foreign investment and competition, while favoritism in allocating credit kept small and medium-size companies from developing. Today’s crisis was long in the making.

How long it will take to resolve depends on the next president’s courage and vision. What the times cry out for is a leader unafraid to challenge the traditional basis of his support--in Kim’s case, the unions and radical students, in Lee’s case, the same power structure that brought South Korea to its current unhappy state. Lee is regarded as incorruptible and Kim in opposition has been politically resolute. Whether either in power would be up to the urgent task at hand is an open question. Another candidate, Rhee In Je, who is seen as forceful and innovative, is running well behind.

This will be South Korea’s third free presidential election since 1987, but the economic crisis casts a long shadow over what should be a celebration of continuing democratic progress. Complicating matters is the long delay between the election and the next president’s inauguration on Feb. 25. Washington’s hope is that the president-elect will closely cooperate with the outgoing administration to begin implementing the IMF reforms and to prepare for the profound changes that must come. South Korea sorely needs a leader able to steer it through the storm.