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(EDITORIAL from Korea JoongAng Daily on June 1)

All News 06:56 June 01, 2016

Less and less competitive

South Korea continues to slide in competiveness. It was ranked 29th in this year’s World Competitiveness Yearbook among 61 nations scrutinized by the International Institute of Management Development (IMD).

The rank was down four notches from last year and the lowest since 31st in 2008. It was lower than China (at 25) as well as Malaysia (19) and Thailand (28).

The IMD evaluated 61 economies based on 342 criteria in four broad categories of economic performance, government efficiency, business efficiency and infrastructure.

Korea sank in all categories except for government efficiency. A protracted economic slowdown that hurt employment brought down its rank in economic performance from 15 to 21 this year. On the business efficiency scale, Korea slipped from 37 to 48.

In labor market competitiveness, a component of the business efficiency evaluation, Korea was almost at the bottom at 51, skidding from 35. In management practice, Korea scored the last at 61, slipping from last year’s 53.

An uncompetitive labor market and lack of entrepreneurship is eating away at the country’s potential and capabilities.

The IMD appraisal is not perfect. Every year it is criticized for being too subjective as its results are mostly based on surveys of businessmen around the world.

Still it is cited as a reference to national competitiveness along with a similar study by the World Economic Forum. It is a useful yardstick in the global context as the rankings are based are on the same criteria annually.

Coincidentally, the country’s national competitiveness markedly deteriorated under the government of President Park Geun-hye. Korea maintained its rank at 22 from 2011 to 2013. It scored at 26 in 2014 and 25 in 2015.

It is another signal of a sinking economy. IMD advised Korea to boost the number of decent jobs and ease regulations while accelerating reforms in labor. The ranking is another reminder that we must get serious about reforms.

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