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.

His ability to bring about change has been hampered by the fact that he does not command a majority in the National Assembly. As a result, his choice of prime minister was blocked by the opposition, the Parliament remains a fractious and feisty place, and a number of scandals have erupted during his first year in office. His party has worked overtime to woo defectors and those efforts have borne fruit. Unfortunately, the enticements are a sign of the continuation of the old-style politics that Mr. Kim had promised to replace.

The most important changes have come in the field of diplomacy. Mr. Kim’s overture toward Japan and his pledge to move forward in the bilateral relationship are measures of his strength and vision. His willingness to put the past to rest is an exemplary manifestation of statesmanship that has the potential to reshape the Northeast Asian strategic landscape. Japan must be ready to work with him to build a new future.

His “sunshine policy” toward North Korea is another bold and imaginative initiative. Mr. Kim understands that unremitting hostility toward the North will never lessen tensions on the Peninsula. He knows that he must take the initiative and lead his nation and its allies, Japan and the United States, in a new round of bilateral diplomacy. He has been tested: Despite unprecedented attempts to open a dialogue with Pyongyang, the North continues to attempt to infiltrate spies into South Korea.

Undaunted, Mr. Kim persists. This week, in an annual ritual, he amnestied 8,812 prisoners. Unusually, this year they included 1,500 political prisoners, one of whom is the world’s longest-serving prisoner of conscience, Mr. Woo Yong-gak, a North Korean commando captured in 1958. Pyongyang has demanded that the political prisoners be allowed to return to the North, but Mr. Kim has insisted that they be swapped for the 136 South Korean prisoners of war the North is thought to be holding.

In a press conference on the eve of his first-year anniversary, Mr. Kim called for a package deal with the North: In exchange for economic aid and the normalization of relations with Washington, Pyongyang would open its nuclear facilities to inspection and rein in its ballistic-missile development program. It is the right thing to do, and it is a deal that only Mr. Kim could make. It is a measure of his authority and his intelligence that he persists in his efforts. He deserves nothing less than our full support through the rest of his term.

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