IMF: South Korea's Corporate Restructuring to Cost 31 Trillion Won

The International Monetary Fund (IMF) put the estimated cost of South Korea's ongoing corporate restructuring drive at 31 trillion won (US$27 billion), saying it will be offset by various benefits in a decade, according to a recent report.

    It used loss given default (LGD) data for corporate debts and employment impact assumptions under a scenario that corporate restructuring in Asia's fourth-largest economy will proceed in the most effective manner, according to (Yonhap) news agency. "Our method gives that cost at about KRW 31 trillion in the adjusted baseline," it said in the report on the benefits and costs of the county's corporate restructuring. 

    South Korea is currently engaged in full-fledged restructure of its shipbuilding and shipping industries amid mounting debts attributable to fierce industrywide competition. "Benchmark results for Korea suggest 5.5%-7.5% of GDP creditor losses and a 0.4%-0.9% of the labor force employment impact from the debt restructuring," the IMF said. 

    On the other hand, South Korea provided the United Nations with US$192.85 million worth of goods and services in 2015, accounting for only around 1% of the global body's total procurement of the year, an official report showed Sunday.

    The figure marks an 8.9% increase from the volume of the UN's procurement from South Korea, according to an annual statistical report by the UN Office for Project Services (UNOPS).

    But South Korea ranked the world's 24th in the field, which is relatively low for its economic size. South Korea is the 11th-largest economy in the world. In Asia, it comes in fourth after China, Japan and India. A total of 991 local firms are registered on the UN Global Marketplace as potential suppliers.