By Mary Jordan
Washington Post Foreign Service
Friday, December 19, 1997; Page A01

SEOUL, Dec. 19 (Friday)—Kim Dae Jung, the dissident voice of a generation of South Korean democracy crusaders, was elected president Thursday in the most remarkable and close-run election in this country's history.

When he takes office in February, Kim, 73, will move into the same presidential Blue House in which military dictators plotted attempts on his life, becoming chief executive of a government that jailed him, kidnapped him, exiled him, sentenced him to death and tried to run him down with a truck and toss him from a ship at sea.

Kim's most immediate responsibility will be to implement wide-ranging austerity measures imposed by the International Monetary Fund in return for a $57 billion bailout package that is designed to ease South Korea's acute financial crisis. During the election campaign, Kim initially balked at accepting the unpopular IMF plan -- which calls for restricting economic growth -- but last week he pledged to abide by it fully. Hours after his two election rivals conceded, Kim moved quickly to reassure international investors.

"In case there is any doubt, let me make my position perfectly clear. I will adhere to the agreement already reached between the IMF and the government of Korea," he said in his first post-election news conference this morning.

"To achieve this, Korea must embrace true and meaningful economic reforms. . . . My government will not rely on old and outdated ideas. Business should no longer feel hand-bound by the over-reaching powers of the government. I will open a new age of democratic economic order that respects market mechanisms and competition."

The election, Kim said, is "an important turning point in the history of our nation," and he made a plea to his countrymen for their help in surmounting what he said will be economic hardships to come.

Kim captured just over 40 percent of the vote in the three-way race -- a victory margin of just 2 percent -- marking the first time since South Korea was founded in 1948 that an opposition candidate has won the presidency. Lee Hoi Chang, 62, the candidate of the governing Grand National Party, finished second with about 38 percent of the vote, while Rhee In Je, 49, who split with the ruling party after losing the nomination to Lee, took about 19 percent.

In conceding defeat, Lee said, "I congratulate Kim Dae Jung. . . . I solemnly accept the will of the people and the result of the election. I will cooperate fully with the winner."

The triumph of Kim, leader of the National Congress for New Politics, reflects voter disdain for the country's politically inbred current leadership, which they blame for the nation's economic crisis. "Finally, there will be a two-party system; this is historic," said National Assembly member Kim Geun Tae. He said that other nations that are worried about the spate of South Korean business failures and the stock market and currency chaos that occasioned the IMF bailout should be heartened by the voters' choice. "It will force Korean politics to be more transparent and predictable," he said.

Thousands of Kim supporters -- who view him as the voice of the poor and the workingman -- danced, clapped and wept joyously in the streets of his agrarian home region, the western province of Cholla. Jubilant crowds surrounded his home in suburban Seoul and filled busy downtown streets. "Oh, my God, I'm so, so happy," said Han Wan Nam, 58, a housewife from Cholla, in an interview. "I am so excited. Yes, Yes. Oh, my God. I cannot sleep at all."

No Chollan has ever served as president, and many in the region feel strongly that the government has discriminated against it, steering both business and public works projects to the more prosperous east, where all its previous rulers have come from. One Kim campaign aide described the euphoria among his supporters this morning as akin to what might be felt in the United States if the first black or woman were elected to the White House.

Kim's victory brought dancing and joy, too, to the streets of Kwangju, the southwestern city in which hundreds of democracy demonstrators were killed by army troops in a government-ordered crackdown in 1980. The government blamed Kim for fomenting the demonstrations, tried him and sentenced him to death. Under pressure from Washington, it later commuted his sentence to 20 years; he was released two years later and allowed to seek medical treatment in the United States.

Kim is seen as a close friend of the United States, having spent 26 months in political exile there -- including a fellowship at Harvard University. No change in the diplomatic relationship between the two allies is likely, analysts say, and Kim has affirmed his support for retention of the 37,000 U.S. troops stationed here.

"The alliance we have with the United States of America is fundamental to our national security," Kim said at his news conference today. "I will make this relationship stronger."

At the same time, diplomats and foreign observers expect Kim to be far more willing than his predecessors to engage in dialogue with Seoul's archenemy, communist North Korea, and many hope this will bring peaceful resolution to the tense stand-off between the two countries since the Korean War ended in an armistice 45 years ago.

The consequences of Kim's victory for South Korea's business community and for international investors here may take some time to sort out -- although the value of the country's currency, the won, plummeted by 11 percent and the main stock market index slid by about 2 percent in late-morning trading. To many financial analysts, Kim represents a drastic change in leadership that adds political uncertainty to the country's already worrisome economic turmoil.

He has promised, among other things, to introduce a new form of government, "a parliamentary cabinet system" with more checks and balances than South Korea's traditionally strong presidential system, but there are questions about exactly what he means. In his three previous runs for the presidency, dating to 1971, Kim had been cast by various right-wing governments as a radical communist, which his supporters describe as political vilification. Nonetheless, many people here have not been able to shake that image of him.

"He is much like a Kennedy; people like him or hate him," said You Jong Keun, governor of the North Cholla region and a friend of Kim's.

You, a maverick U.S.-educated advocate of the free-market reforms that the IMF has demanded of South Korea as a condition of its bailout, is in line to be a high-profile adviser to the president-elect. In an interview Wednesday night, You said that Kim is deeply committed to the IMF reforms and is prepared for the difficult tasks that they require.

Analysts say Kim will have a particularly difficult time dealing with the country's labor unions -- a longtime hard-core base of his support and a key element in the economic problems here. High wages demanded by the unions and laws that make it difficult to lay off workers have contributed heavily to the country's economic woes, and Kim has said in campaign speeches that he will advocate salary cuts rather than layoffs to help businesses pare costs.

Kim's thin margin of victory does not necessarily mean he will have a weak government, because the power of the presidency is great here. But since the Grand National Party rather than Kim's National Congress constitutes the largest bloc in the legislature, he could face difficulty in pushing through emergency economic measures to deal with the financial crisis.

In this, he will be aided by an unlikely, and some say, ingenious political alliance with Kim Jong Pil, the founder of South Korea's national intelligence agency, whose men tried to kill Kim Dae Jung in years past. Analysts say Kim Jong Pil, whose support helped boost the president-elect to victory, is likely to be named prime minister.

As the votes were counted throughout the evening, millions of citizens were transfixed as it became clear that Kim would win. People passed each other in hotel lobbies, taxis, newsstands and convenience stores, chatting with strangers. "Can you believe it!" they said. "Amazing."

Even American pop idol Michael Jackson called from the United States for the latest vote count, according to You, who spoke with the singer. Jackson is considering building a huge amusement park in Cholla and met with Kim and You to discuss the project last month.

Kim has said that he will not wait until his Feb. 25 inauguration to begin steering the country out of its economic detour. Rather, he said, he would work closely with his longtime rival, outgoing President Kim Young Sam, to help the country regain its footing as swiftly as possible. Kim Young Sam, who is required by law to leave office after a single five-year term, pledged to cooperate closely with the president-elect as he begins trying to breathe new life into an economy that only a month ago was the world's 11th-largest.

Kim Dae Jung said he would meet soon with IMF Managing Director Michel Camdessus to put to rest any international concern that he might waver on the conditions the lending agency has imposed on South Korea. For his part, Camdessus welcomed Kim's election and noted pointedly that during the campaign Kim "had given his support, and reiterated his support," for the IMF program. Moreover, Camdessus said, Seoul is "moving swiftly to implement" the economic restructuring measures that the IMF is demanding.

Camdessus's comments came at a news conference in Washington to announce that the IMF board, representing its 181 member countries, had approved the scheduled release of an additional $3.5 billion to South Korea under terms of the $57 billion bailout. The release of the funds provides an injection of capital that the Seoul government desperately needs to ensure it has enough foreign currency to continue paying its debts to overseas lenders.

Adding last-minute drama to the emotional election campaign, Kim's younger brother died Wednesday of a liver ailment, and his last words reportedly were: "Don't tell my brother." Kim learned of the death inadvertently early today and spent part of election day mourning at the hospital.

Staff writer Paul Blustein in Washington and special correspondent Lee Keumhyun in Seoul contributed to this report.