Situation Analysis
By mid-December 1997, Korea faced an economic crisis triggered by the massive loss of investor confidence in East Asia. With foreign exchange resources depleted, the nation's private sector had some US$25 billion in short-term foreign currency loans due. Its currency had dropped more than 40 percent in value virtually overnight, and the value of portfolio investment dropped during that same period by 50 percent.

In response, President Kim Young-sam assembled a team of senior economic advisors to assess the economic situation, produce an IMF-supported economic reform plan, and restore stability and investor confidence. The team announced dramatic reforms in the financial and corporate sectors and new reporting and accounting requirements that were in keeping with international standards. The team also negotiated a labor-government-management agreement that made Korea a much more attractive location for foreign direct investment.

However, Korea was viewed by the international investment community as hostile to foreign investment, plagued by intransigent labor unions, and having an economic structure dominated by inefficient conglomerates whose ties to politicians permitted them access to almost unlimited funding from a politically dominated banking system. Due to some well-founded negative perceptions and an image of deliberate discrimination against foreign investors, the new team's efforts were not accepted by the markets and the commentators. In short, the "New Korea" had a communications problem that undermined its reform program before it was able to get off the ground.

Implementation
Burson-Marsteller began work with the Ministry of Finance and Economy at the beginning of February, 1998. Burson-Marsteller's immediate objective was to help Korea take charge of the global dialogue so that it could become proactive rather than letting the discussions be defined and led by others. The sovereign communications program strategies incorporated an array of communications channels to promote key messages demonstrating commitment to economic reform, thereby beginning the process of restoring investor and lender confidence in the Korean economy.

Burson-Marsteller immediately established an international, fully integrated team including core participants in New York and Seoul, and an extended network of professionals from offices in the U.S., Europe and Asia. An extensive action plan, keyed to a 90-day timetable, was designed to first stabilize the situation, then provide the momentum to proactively communicate reform efforts to the target audiences.

The communications objectives were to demonstrate national commitment to a plan of action, including fundamental reform of investment regulations, promote the integration of Korea into global markets, and support the integrity and transparency of the economic reform process. The program included a number of communications research and delivery tools, including: perception surveys and other audience assessments; message development; media training for senior officials; drafting of various communication materials for engagements in the U.S. and Europe; international media relations; and senior counsel on communications related to emerging issues and financial negotiations and transactions.

Results
Burson-Marsteller's strategic communications and consulting services fortified the Ministry's efforts to effectively communicate the government's stabilization and reform plan during Korea's most serious economic crisis in 40 years. In the months following the inauguration of the new president, international institutional investors, representatives of the Bretton Woods organizations, and officials from key lending countries have acknowledged the professionalism and the success of the Korean government's impressive efforts to restore international confidence.

As a result of effective communication of the government's reform program, the macroeconomy stabilized more quickly than any other country in East Asia. Moreover, members of the Korean government's economic team are consistently presented in the international media as among the most steadfast economic reformers in the region.