Treasury secretary Robert Rubin said on Wednesday the United States would chip in $1.7 billion early in January to help South Korea try to regain its economic footing.
Rubin said the decision to permit Seoul to make an early draw on what was expected to be a second line of defense was necessary because S Korean stability was critically important to US economic and national security interests.
He said S Korea already has taken significant steps to open up its economy and to reform its management and it was fitting for its trading partners to take an extra step to speed the effort. This is a major world event and they have made extraordinary efforts, Rubin said of Seouls newly-elected government. It seemed appropriate for the G7 countries and other nations involved in the second line of defense to move their aid effort forward, he added.
The US aid is part of $8 billion to be offered to Seoul by a group of donor countries including Japan and other members of the G7 including Britain, Canada, France, Germany and Italy. The money will supplement another $2 billion that is being supplied by the IMF, which is spearheading a nearly $60-billion effort to get SKorea back on a solid growth path.
Rubin praised the IMF effort, which commits South Korea to tough economic reforms, as a good one but said that it would be strengthened by the supplemental aid the United States and others were advancing.
In a lengthy briefing, the U.S. Treasury chief said he considered it very highly likely the U.S. contribution
