IMF clears Korea

The IMF has assured the Danish Ministry of Economic Affairs that money made available to Korea has not been used to subsidise shipbuilding.

In March, the IMF`s Nordic-Baltic office was asked if the assistance for Korea had lead to shipbuilding subsidies. In May, June, and August, Denmark asked the office to enquire about a possible link between Korea`s fund programme and the alleged non-commercial financing of shipbuilding.

On each occasion the IMF investigated, and replied that the programme does not comprise or encourage subsidies to the shipbuilding industry. The IMF understands that Korea is committed to avoiding direct lending on non-commercial terms.

Thorkil Christensen, president of the Danish Shipbuilders` Association says that the IMF provided only $18 billion of the $58 billion rescue package, and it is important to know what is happening with all the funds. “We must check that the money does not flow through the banking system and end up subsidising loss-making industries,” he says.