Foreigners Forecast Gloomy Future for Korea

Four out of 10 foreign businesspeople residing in Korea think that the country may face an economic crisis in the next five to six years.

The Federation of Korean Industries on Tuesday conducted a survey of 100 foreigners in Korea, including commercial attaches and foreign professionals, on Korea’s international competitiveness. When asked whether there is a chance that Korea may encounter another economic crisis in the next five to six years, 39.3 percent of respondents said, “Yes.”

Thirty-six percent of respondents cited the rise of new economic powers, such as China and India, as a major limiting factor on the Korean economy, followed by rising prices of fuel and raw materials with 21.3 percent. This indicates that a majority of foreigners think foreign conditions will determine domestic economic conditions in the future. Only 2.2 percent said that the security instability arising from the North Korean nuclear problem is a major threat to the economy of Korea.

When asked what negative elements could hamper the sound business environment in Korea, 38.2 percent picked high land prices, followed by strong labor-management conflicts with 21.8 percent, and excessive corporate regulations with 11.8 percent.

In addition, they pointed out inflexibility in the decision making structure (23.8 percent), the lack of employee willingness to embrace globalization (19 percent), and incompetence in designing and marketing (19 percent) as the main weaknesses of Korean companies.

However, they pointed out diligent workers (33.8 percent), ceaseless technological innovations (26.3 percent), and bold decision making (22.5 percent) as strengths of Korean firms.

abc@donga.com