Tumble in economic ranking


  • Letters
  • Sunday, 17 Oct 2004

SEOUL: Korea stood out in this year’s national competitiveness ranking issued by the World Economic Forum for its significant drop: 11 places from 18th last year to 29th this year. 

The sharp decline is hardly surprising, given the government’s single-minded pursuit of priorities that contribute to dividing the nation rather than integrating it. 

The main reasons for Korea’s tumble are largely related to the public sector, reflecting the poor quality of government. They included, among other things, deterioration in the macroeconomic environment, an indication that the government has been poor in managing the economy at the macro level. 

This is evidenced by the worsening growth outlook and the government’s inability to improve it.  

The WEF report ranked Korea 78th out of the 104 nations surveyed in the government’s ability to forecast economic recession. 

The report also showed Korea has big problems in the labour and public sectors. Korea ranked 92nd out of the 93 nations surveyed in labour-management relations and 73rd in ease in hiring and firing employees. 

These rankings come as no surprise; they just confirm the urgent need to improve industrial relations in order to make the nation a business-friendly place. 

The nation also placed low in areas measuring the quality of public institutions: 85th among the 104 nations listed in confidence in politicians, 81st in parliamentary efficiency, 77th in prevalence of illegal political funds and 63rd in corruption in taxation, 57th in budget wastes and 49th in favouritism among public officials. 

In contrast, Korea scored very high in those measures that assess its technological prowess, especially information technology. It ranked second in the number of Internet users, third in both Internet access at schools and the quality of Internet service providers. 

It also placed high in personal computer penetration (8th), the ability to acquire new technologies (14th), corporate investment in research and development (14th) and the government’s ability to promote information technology (14th). 

Korea’s sharp decline made a stark contrast with other major countries in Asia, which maintained or improved their high positions: Taiwan (fourth), Singapore (sixth), Japan (ninth) and Hong Kong (21st).  

The WEF report should be taken as a warning that the government should not waste time and energy on political and social issues that just divide the nation, but should concentrate instead on regenerating economic dynamism. 

It is widely recognised that Korea has at most 10 to 15 years before entering a stage where high growth becomes impossible for demographic reasons.  

If we waste this brief period of time, the window of opportunity for Korea to join the ranks of advanced countries will be closed forever. 

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