What Korea could (or shouldn’t) have done since the 1997 financial crisis?

As I have pointed out on more than a few occasions, the 1997 financial crisis could have been a blessing in disguise for Korea.

The worldwide crisis is progressing as expected, with the financial crisis deepening. It is leading to tensions across the world. The intensity of a crisis would depend on how Korea prepare for the crisis during the final years of the unraveling.

What Korea could have done (or shouldn’t have done), then?

-Could have fortified economic fundamentals and rebuilt on the basics

-Could have revamped its innovation engine; again, Korea hasn’t come up with the future growth platforms.

-Could have retained and grown manufacturing jobs to maintain a middle class society, and the standard of living that accompanies that class

-Could have grown competitive SMEs given they are the engine of hiring and pursued policies to have them compete at the level playing field.

-Could have reined in international capital inflows to a certain degree since they have been largely detrimental to a healthy Korean economy due to their speculative nature

-Could have pursued tough monetary policy

-Could have managed the debt levels; could have pursued sound fiscal policies.

-Shouldn’t have engaged in distorting interventions (e.g., bail out failing companies).

-Could have made an effort to overcome shortcomings in its mercantilist policy and should have developed public policy to make a transition to an economy that is sustainable even after the unraveling stage of global bubbles

-Could have reformed financial sector

-Could have upgraded its educational system: for instance, Korea’s engineering schools aren’t up to par to the West.

-Could have reformed the bloated public sector