As one Korean business daily recently noted, each of the three previous administrations found itself mired in an economic crisis during its final year in office. Will President Lee Myung-bak’s administration experience a nightmarish economy, too? Unfortunately for both him and the rest of the nation, few would say the chances are low.

Worst hit among the three was President Kim Young-sam’s administration, which failed to shield the nation from the 1997-98 Asian financial meltdown. The culprit was the high level of corporate debt. The liabilities of an average manufacturer, which stood at 317.1 percent of its net assets in 1996, shot up to 396.3 percent the next year.

By the time the Asian financial crisis hit, the state coffers were nearly empty. When the nation was on the brink of sovereign insolvency, the administration had to look to the International Monetary Fund for help. It had to accept bailout loans under humiliating terms.

Its successor, the administration led by President Kim Dae-jung, failed to learn the lesson from the Asian crisis. The administration, when the economy began to slump during the latter part of its term, chose to encourage spending on credit cards as a way out. As a consequence, the number of cards in use surpassed the 100 million mark, meaning there were 4.6 cards for an average Korean adult. Card spending jumped from 443.37 trillion won in 2001 to 622.9 trillion won the next year.

The nation had to pay the price. Though the growth rate shot up to 7.2 percent, the runaway card spending was mainly responsible for increasing the number of credit delinquents from 2.4 million in 2002 to 3.5 million in 2003.

It was land developers who planted the seed of an economic crisis during the final year of President Roh Moo-hyun’s administration. They borrowed heavily in the form of project financing, in which the project’s assets, rights and interest were held as collateral and the repayment was to derive from the project’s cash flow on its completion.

Outstanding project-financing loans doubled from 24.8 trillion won in 2005 to 49.2 trillion won in 2006 and shot up to 69.7 trillion won in 2007. The Roh administration started to rein in project financing in its final year in office, reducing its portion to 30 percent of the total loans.

When it was inaugurated in February 2008, President Lee Myung-bak’s administration should have taken up where its predecessor left off and tightened the spigot on project financing. But it did not. As such, outstanding project-financing loans peaked at 83 trillion won in that year.

A fall in property prices brought homebuilders, construction companies and such non-banking lenders as savings banks to their knees. But this problem should be manageable, with the Lee administration having cleaned up much of the mess.

The real threat, however, is coming from snowballing household debt, which was at 913 trillion won at the end of last year, up 66 trillion from the previous year. As the Lee administration tightened regulations on borrowing from banks last June, a growing number of households turned to insurance companies, credit unions and other non-banking financial institutions as alternative lenders.

On Sunday, the Financial Services Commission announced new regulations on lending, this time imposing them on non-banking financial institutions. Will the new regulations put an end to the “balloon effect?” Probably not. Just as pressure, when applied in one area, pushes the air into another area of less resistance, so borrowers in desperate need of money will now turn to private lenders, including loan sharks.

It goes without saying that households must keep their debt at a manageable level. But it is easier said than done, and all the more so because income is not increasing and employment opportunities are dwindling. Moreover, the Bank of Korea has been keeping the cost of borrowing low under pressure from the administration.

The central bank is urged to raise its benchmark rate in March, instead of keeping it at 3.25 percent for the ninth consecutive month. The administration will have to stop meddling in the bank’s monetary policy. Instead, it will do well to focus on job creation.