Korea Ranks 55th out of 80 Nations in Labor Relations

Labor conflict was proved to be the biggest factor in worsening the business environment in South Korea.

According to an analysis of the World Economic Forum`s 2002-03 Microeconomic Competitiveness Index (MICI) report by the Korea International Trade Association, South Korea ranked 55th among 80 countries in terms of labor-management relations. South Korea lagged behind its Asian rivals like China, Japan, Singapore, and Hong Kong and even many developing nations.

In the MICI, which evaluates 65 factors influencing corporate competitiveness, South Korea ranked below 50th position only in the item of labor-management relations. Labor relations are evaluated by time and procedure for the settlement of a labor dispute, procedures for employment and lay-off, flexibility in pay decision, correlation between pay and productivity and unemployment rate.

According to the World Competitiveness Yearbook 2003 released by the International Institute for Management Development based in Switzerland, South Korea came 30th among 30 nations surveyed in labor relations.

In the MICI`s overall ranking, South Korea placed 23rd, compared with Singapore (9th), Japan(11th), Taiwan(16th) and Hong Kong(19th).

Among the 65 factors in the World Economic Forum`s MICI are 16 factors related to company inside strategy and activities, and 49 factors related to external environments, such as technology, infrastructure, finance, administration, and labor-management relations. What was notable is that Korea`s rivals in the competition to develop into an economic hub in Northeast Asia topped the lists where Korea ranked very low. In labor relations, Singapore ranked 1st and Japan 5th. Singapore also came 1st in the policy transparency list, in which Korea placed only 30th. Hong Kong ranked 1st in both streamlining administration regulations and how easy staring a business is. In the two areas, Korea ranked 27th each. In qualities of public servants, China came 3rd while Korea ranked 24th.

Mi-Kyung Jung mickey@donga.com