It has been a tumultuous first year for South Korean President Kim Dae Jung. On every front -- political, economic and diplomatic -- he has faced enormous challenges. His moral authority, his willingness to make hard choices and his vision have stood him in good stead. By virtually every measure, South Korea enters its second year under his rule in better shape than when he took office. There will be no rest for Mr. Kim, however. His nation is one of the world's flash points. There is little margin for error, no time for complacency. Fortunately, few individuals seem as capable as Mr. Kim of seizing the moment and rising to the challenge.

When Mr. Kim took office, South Korea was the world's 11th-largest economy. But rather than basking in his country's success -- it had just been invited to join the Organization for Economic Cooperation and Development, the "rich man's club of nations" -- his administration was forced to deal with national bankruptcy as South Korea battled the Asian flu. The economy shrank 5.5 percent in 1998 and unemployment swelled to 6.8 percent. In response, Mr. Kim pushed for sacrifices from all South Koreans. The industrial landscape has been transformed as the chaebol, or leading conglomerates, were forced to liquidate, consolidate or sell off assets. Labor unions accepted layoffs. The rickety financial sector has been turned upside down.

The results have been impressive. Forecasts for 1999 anticipate growth of 2 to 4 percent, and the economy is expected to grow 5 percent in 2000. A year ago, an IMF bailout was needed to keep the country solvent. Today, foreign exchange reserves top $55 billion. More work remains to be done, however. Unemployment is expected to reach 9 percent this month. The chaebol are resisting needed structural reform, and labor unions, seeing the turnaround in the macroeconomy, are returning to their old ways. Finally, the government still shows a troubling inclination to lead the economy, instead of letting market forces do the work. Mr. Kim seems to understand the work that is to be done and shows no sign of letting up.