South Korea’s debt
SIR – Your article about “emerging-market contagion” ranked countries according to their vulnerability to the global credit-crunch (Economics focus, February 28th). But you did not reflect the actual situation of the Korean economy. The article portrayed South Korea as the joint third-riskiest among the countries surveyed, citing “large short-term foreign debts and highly leveraged banks”. This is simply not the case.

Let me provide you with accurate figures. South Korea’s short-term external debt is 75% of its foreign-exchange reserves and it continues to decline. The South Korean banks’ average loan-to-deposit ratio stood at 118% as of the end of 2008 and has been on the decrease since last June.

Thus, the overall risk assessment for the Korean economy, as described in your article, relies upon incorrect information and estimates.

Cheol-kyu Park
Spokesperson
Korean Ministry of Strategy and Finance
Seoul

Editor’s note: Our figure for short-term debt as a percentage of foreign-exchange reserves included all debt due within the next 12 months, the definition favoured by the IMF. At the end of December this was 96%. The figure of 75% includes only liabilities with an original maturity of up to one year; it excludes maturing long-term debt. Our loan-to-deposit ratio covered all commercial and specialised banks and excluded certificates of deposits, the same definition used for all the countries we surveyed. The Bank of Korea’s latest figures show this to be 136% at the end of December.

이걸 보고 나라망신이라고 한다. 박철규씨 같은 사람이 재정경제부에 있으니 외국인이 환투기를 하는 거다. 이코노미스트가 예전에 발표한 자료를 보고 당신들이 제신한 수치는 잘 못되었다고 했으나 이코노미스트는 공신력있는 기관인 IMF기준에 따랐으며 일부자료는 한국은행에서 발표한 것을 인용했다고 밝혔다. 또한 이코노미스트가 사용한 기준은 모든 국가에 동일하게 적용했다고 답변했다. 재경부에서 지면에 대놓고 무식함을 드러내기 전에 이코노미스트의 자료를 다시 한번 분석했다면 저런 망신은 당하지 않았을 것이다.