This is unusual. In just 18 days, all major international credit rating agencies have acknowledged that the Korean economy is in stable condition and the government is managing diverse risks well. On Sept. 14, the most conservative Standard & Poor’s followed the path of Moody’s Investors Service and Fitch Ratings by upgrading Korea’s sovereign credit rating from A to A+.

At a time when the term “downgrade” is ringing in the ears of many people (Moody’s just threatened a downgrade of the U.S. sovereign rating, not to mention massive downgrades of banks in Europe), the almost simultaneous upgrades of the global credit rating troika are conspicuous. They all cited the sound financial policies, resilience of the economy and most importantly, “less negative assessment of the geopolitical risks on the Korean Peninsula.”

With this upward adjustment, Korea has finally reverted back to its pre-1997 crisis credit ratings. It was Dec. 3, 1997, when the International Monetary Fund provided a bailout fund of $19.5 billion to Korea to help the country overcome the financial crisis. Korea repaid the loan relatively quickly ― on Aug. 23, 2001 ― amid a national fanfare celebrating the successful graduation from the financial crisis era.

Although the loan account was closed, the stigma of the 1997 crisis still lived on afterward in the collective psyche of people, as vividly shown in the panic mode of September 2008. Ever since the crisis, the Korean financial market has fluctuated at the slight indication of a cough in other major economies, even assuming the name of a global automated teller machine. Even in the recent diplomatic feud with Japan, one of the retaliatory measures considered by Japan was said to be the termination of the currency swap agreement.

The restoration of the credit ratings to the pre-crisis level, therefore, is a symbolic event that sends a message that the foreign confidence in the Korean financial market has been restored as well, through ups and downs in the past 15 years. In a practical sense, the chapter for the 1997 financial crisis has now finally been closed.

Well, having realized the importance and influence of the global credit rating agencies, the Ministry of Strategy and Finance has made systematic efforts over the years and it deserves credit. Through meetings and road shows, the ministry has reached out to these agencies to convey an accurate picture of the Korean economy. In fact, the most recent meetings with these troika agencies took place in May and July. The MOSF has also stood against the increasing demand for populist policies and maintained its policy course consistently. All these efforts have apparently borne fruit.

The credit rating agencies’ endorsement, however, carried with it a caveat. These agencies all underscored the relatively stable geopolitical environment of the Korean Peninsula, including the North Korean factor, as a basic rationale for the adjustment.

The trouble is, most geopolitical issues are simply beyond South Korea’s control. The escalating confrontation among neighboring states in this part of the region since August has taught us how quickly the seemingly existing stability could evaporate in a sudden turn of events. If so, how the agencies evaluate Korea’s overall situation may also be affected, for better or worse.

Of course, for those factors beyond our control, there is nothing we can do about them other than hope for the best. But staying vigilant and bracing for the unexpected development in this dynamic region at this volatile moment will increase the likelihood that the international market continues to view the Korean economy positively against all the odds.

It was one sudden slip in 1997, but it took 15 years to crawl back to where the country used to be. The question is how it gets the momentum going in this treacherous environment of 2012.

By Lee Jae-min

Lee Jae-min is a professor of law at the School of Law, Hanyang University, in Seoul. Formerly he practiced law as an associate attorney with Willkie Farr & Gallagher LLP. ― Ed.