New president warns Koreans to tighten belts

South Korea's opposition leader, who won the presidency on Friday after a close vote-count, yesterday promised to abide by stringent conditions attached to an IMF bail-out package.

Kim Dae-junga, a former dissident who suffered imprisonment and torture at the hands of successive army-backed regimes, called on Koreans to prepare to endure hardships in the face of the country's severe economic crisis. He also urged North Korea to resume the dialogue on peace for the divided peninsula.

South Korea's battered stock market reacted nervously to Mr Kim's victory, with stocks down 3.04 per cent at 405.76 points shortly after trading began

"I will faithfully abide by agreements between the IMF and the current government," Mr Kim said in his first news conference since winning the presidential election.

Kim got a boost from IMF Managing Director Michel Camdessus who hailed South Korea's progress in implementing tough fiscal and structural reforms, saying it had taken even more steps than the agency had expected.

Mr Kim had been blamed for worsening South Korea's crisis during the election campaign, by saying to the alarm of foreign investors that he would renegotiate some of the IMF conditions.

He takes the helm of a country that was forced to swallow its pride and accept the record-breaking bailout package of nearly $60bn (pounds 37bn) from the IMF earlier this month. The IMF announced it had approved the second tranche of $21bn in rescue loans.

Mr Kim said he would contact US President Bill Clinton to request co- operation on the economy and would arrange contact with the Japanese Prime Minister, Ryutaro Hashimoto, to discuss both economic and security issues. He also said the next government would maintain its strong alliance with the United States, which maintains 37,000 troops in the country.

The ruling party's candidate, Lee Hoi-chang, conceded victory to his rival at 3am yesterday. With all votes counted, Mr Kim had 40.3 per cent followed by Mr Lee with 38.7 per cent. Mr Kim is not due to take office until February 25.

- Reuters, Seoul