October 30, 1997.
It was a late night, nearing midnight, yet the lights in the president's office at the Blue House were still brightly lit.
Inside the spacious office, heavy with silence.
Seated on a vintage hardwood sofa was President Kim Sung-kyu, flanked by his close aides—Chief Presidential Secretary Koo Hyung-ki and Deputy Prime Minister for Economic Affairs Choi Jin-woo. All three wore grave expressions.
Having just set down the agreement painstakingly hammered out with the IMF delegation, President Kim straightened his posture and broke the tense silence.
"This isn't an agreement—it's a declaration of surrender."
With clear displeasure etched across his face, President Kim turned his gaze to Deputy Prime Minister Choi.
"This really the best we could do?"
Choi Jin-woo, worried that the hard-won deal might be scrapped on the spot, responded quickly and carefully.
"Chairman Townsend's stance was extremely firm. We had no choice but to concede on several key demands."
President Kim's face twisted in frustration.
"Didn't you say that securing an additional $10 billion through that fund—what was it, Eldorado or something—would help make the negotiations smoother?"
Choi nearly spoke up to say that this was, in fact, what had allowed them to avoid being completely steamrolled, but he bit his tongue.
There was no point in bringing it up now. Instead, he bowed his head and replied calmly.
"It helped us put out the most urgent fires. But as you know, with Japan's situation deteriorating, capital outflows have only accelerated. We simply ran out of time."
At that, Chief Secretary Koo Hyung-ki, seated across from the president, added his voice.
"The exchange rate and stock market are both in free fall. If this continues, the economy might reach a point where recovery becomes nearly impossible. And with growing pressure from the U.S., distasteful as this may be, I believe we've reached the point where it's better to accept the deal as is."
Despite the words of his two closest advisors, President Kim said nothing. Arms crossed, brows furrowed, he remained silent.
Signing this would make him the first Korean president in history to accept a bailout from the IMF under such harsh terms—an ignominious legacy he was not eager to embrace.
But the longer they delayed, the worse Korea's situation became.
Choi Jin-woo leaned forward, speaking more urgently now.
"Sir. Over ten billion dollars in short-term debt is set to mature before the end of the year—debt we'll have to repay if extensions fall through."
"..."
"On top of that," Choi Jin-woo continued, "if you factor in the dollars needed to import essentials like crude oil… with all due respect, within a month, our foreign exchange reserves will be completely depleted."
Staring at President Kim Sung-kyu, who remained tight-lipped, Choi spoke again with desperate urgency.
"If that happens, we'll be forced to accept IMF terms even worse than the ones on the table now."
"Mmgh…"
A groan of frustration escaped President Kim's lips. Though he clearly hated it, he finally gave the order, as if there was no other choice left.
"Convene the State Council."
Holding a State Council meeting was a necessary step for formally approving the signing of the agreement.
"Yes, I'll make the calls immediately."
Having received the answer he had hoped for, Choi Jin-woo let out a silent sigh of relief. Wary that the president might change his mind, he quickly rose to his feet.
Even though it was late at night, he had already given the ministers a heads-up that an emergency State Council meeting might be called, so everyone would be on standby. There should be no issues.
As Choi stepped out of the president's office, he let out a quiet breath he hadn't realized he'd been holding. It wasn't over yet—but they had just cleared one of the biggest hurdles.
The Next Day.
On the 19th floor of Government Complex I in Gwanghwamun, Deputy Prime Minister of Economy Choi Jin-woo met with IMF President Townsend in his office to sign the official agreement for the bailout package.
Unlike Choi Jin-woo, who wore a grim expression as he put his name on the document, Townsend looked thoroughly pleased, as if he had secured everything he wanted.
Once both sides had finished signing, they stood up, exchanged copies of the agreement, and posed briefly for commemorative photos. Townsend was the first to extend his hand, smiling.
"Now that the bailout is in motion, I hope Korea can quickly overcome the foreign exchange crisis and return to stability."
Choi Jin-woo, shaking his hand with a bitter look, replied smoothly in English.
"I sincerely hope so as well."
He then handed the signed agreement to Director Jeong Ji-hoon, who was standing nearby, and turned to Townsend again.
"The agreed funds will be transferred today, correct?"
"Of course. Washington headquarters has already authorized it. The first tranche—$5.5 billion—will be wired shortly."
Hearing the firm confirmation, Choi Jin-woo allowed a trace of relief to appear on his face. Just then, Director Jeong cautiously interjected.
"The press is waiting in the main conference hall."
With a small nod, Choi turned to Townsend and gestured.
"Shall we head to the press conference?"
"Let's," Townsend replied cheerfully.
Wearing his ever-pleasant smile, the IMF president led his delegation, following the Ministry of Finance staff toward the conference room where the event had been arranged.
"Whew…"
Choi Jin-woo let out a quiet sigh, almost inaudible, at the sight of Townsend striding out like a conquering hero. Then, he reluctantly followed with heavy steps.
The main conference hall of Government Complex I was large enough to hold up to 400 people.
It was typically used for official events, such as the opening and closing ceremonies for civil servants. But today, it was packed wall-to-wall with reporters.
In addition to the domestic press, a significant number of foreign correspondents had shown up. The Korean journalists in particular wore grim, heavy expressions.
Among the crowd were Ko Dae-hong, a photojournalist from Hansung Daily, and Joo Chi-do, a reporter for the World Economic Times.
Holding a notepad in one hand and seated in a chair, Joo looked around and remarked,
"Usually for something like this, all the high-ranking officials from the Finance Ministry would be out in full force. But I hardly see any of them today."
Next to him, Ko Dae-hong had just mounted a camera with a telephoto lens onto a tripod. With a gruff voice, he replied,
"This moment is going to go down in history as the humiliating day Korea bowed to the IMF. Who'd want their face immortalized in photos at an event this disgraceful?"
"Well, I suppose I'd feel the same way if I were them."
Joo Chi-do clicked his tongue and struck up conversation again.
"Deputy Prime Minister Choi must be under a tremendous amount of pressure to lead today's press conference."
Ko Dae-hong, testing his newly loaded film by snapping the shutter, replied in a blunt tone,
"Compared to the suffering the people will endure under the harsh IMF regime, this is nothing."
"Yeah, you're right," Joo Chi-do nodded in agreement.
Just then, a murmur rippled through the crowd as Deputy Prime Minister Choi Jin-woo entered the conference room alongside IMF President Townsend.
Click-click-click! Snap!
A thunderstorm of shutter sounds erupted from all directions, camera flashes blazing in rapid bursts.
As Finance Ministry staff and security personnel cleared a path, Choi Jin-woo walked through with a rigid, grim expression—while Townsend strolled beside him with a relaxed smile, the contrast between the two men painfully stark.
"Don't need to see the agreement to know who came out on top," Ko Dae-hong muttered bitterly, lowering his camera.
Once the two men climbed onto the stage and took their seats in the chairs prepared for them, the frenetic flashing of cameras began to subside.
A moment later, Choi Jin-woo stepped up to the podium, where multiple microphones stood waiting.
He gazed silently for a brief moment at the sea of reporters and cameras facing him, his face heavy with emotion. Then, with visible difficulty, he began to speak.
"Fellow citizens… Today, I stand before you as Deputy Prime Minister in charge of our nation's economic policy, with a deep sense of remorse and a sincere heart to offer my apologies."
His voice trembled as he continued.
"The chain bankruptcies of highly leveraged conglomerates, the subsequent surge in non-performing loans at financial institutions, and the spread of financial instability from Southeast Asia—these combined crises overwhelmed us. We failed to manage the situation wisely and have ultimately been forced to seek emergency funding from the IMF. For this, on behalf of the entire economic team, especially the Ministry of Finance and Economy, I offer my heartfelt regrets to the Korean people."
"The government has been working with the IMF…"
As his low but resolute voice carried on, announcing the conclusion of IMF negotiations, the entire nation watched in silence—with a shared, crushing sense of despair.
"…A standby credit of 21 billion U.S. dollars will be provided to Korea over a three-year term. Of this, 5.5 billion dollars will be transferred to the Korean government today.
In addition, the IBRD has completed preparations to provide 10 billion dollars to support specific structural reform programs, and the ADB President has pledged 4 billion dollars.
Furthermore, the United States, Japan, Australia, Canada, France, and Germany have agreed to jointly extend an additional 20 billion dollars if further financial assistance is required.
Korea's execution of the agreed conditions is essential to overcoming this historic economic crisis..."
With arms crossed, Seok-won stood in his office, watching the televised press conference. After Deputy Prime Minister Choi Jin-woo had spoken, IMF President Townsend took the podium to deliver his official statement.
A bitter expression formed on Seok-won's face.
"So, they've finally reached an agreement."
The market, which had been in turmoil, gripped by fear that last-minute negotiations might collapse and push the country into default, could now breathe a sigh of relief—at least for the moment.
"But the crisis isn't over yet."
Details of the agreement would soon be disclosed, but even now, he could anticipate some of the harsh conditions: a 25% base interest rate hike, approval for hostile foreign takeovers of domestic firms, permission for foreign financial institutions to acquire Korean counterparts, and shutdowns of insolvent finance companies.
Once these demands were implemented, Korea's economy—and its people—would inevitably suffer deep, enduring pain.
"In the end, whenever a harsh winter hits, it's the ordinary people who bear the brunt."
As the financial crisis deepened, countless businesses had collapsed in succession, leaving a flood of newly unemployed workers on the streets.
Mass layoffs had led to family breakdowns, and even after Korea overcame the IMF crisis through a nationwide effort, the social and economic scars remained for years.
As Townsend finished his statement and, skipping questions, exited the conference hall alongside Choi Jin-woo, Seok-won watched silently from his office, eyes clouded with thought.
"We may not be able to avoid the oncoming winter," he muttered. "But I won't let them just waltz in and scoop up our most valuable companies and assets like they're on a shopping spree."
Walking over to his desk, Seok-won picked up the keyphone receiver.
After a few rings, the line connected. He spoke immediately.
"How's the market sentiment?"
Recognizing Seok-won's voice, Manager Choi Ho-geun replied right away.
[As soon as news of the agreement broke, the market hit bottom and then started rebounding.]
After wave after wave of bad news—corporate bankruptcies, skyrocketing exchange rates and interest rates—this was the first genuine piece of good news. Naturally, investors were reacting with joy.
"How far along are we with the buying operation?"
Choi Ho-geun answered cautiously, glancing around before replying,
"We've only managed to buy about half so far."
Seok-won didn't reprimand him harshly.
"It hasn't been long since I gave the order. That makes sense."
Seok-won checked the stock index on the monitor installed on his desk and continued.
"Let's pause buying for now."
[Are you saying we should stop, not rush to buy before the stock price rises further?]
Choi Ho-geun asked with a puzzled tone, and Seok-won calmly responded,
"Yes. Although the price will surge briefly on this rare piece of good news, there will soon be a fluctuation. We'll resume buying then."
Only then did Choi Ho-geun grasp the meaning and reply in understanding,
[Understood.]
After hanging up the receiver, Seok-won muttered softly while watching the sharply rising stock index,
"Unfortunately, this rally is a fake rebound."