2 Futures Seen for Korea: Powerhouse or Laggard

Korea as the world's seventh-richest economy? Sounds terrific. At the same time, it sounds like a faraway dream, especially to many Koreans, who are still scarred by the 1997 economic crisis.

So believes Dominic Barton, who heads the Seoul office of McKinsey & Company, a global business consulting agency.

In a speech to Korean and foreign business people and economists in Seoul on Thursday, Mr. Barton said that Korea could become a United Kingdom-sized economy by 2010 with an equivalent gross domestic product per capita, given McKinsey's assessment of factor productivity in the Korean economy, in-depth analysis of key sectors and experience in working with Korean companies. (Article on page 4.)

"We believe that is a reasonable target for the country to go for," Mr. Barton said. But he attached a precondition. "That requires a very serious restructuring. Otherwise, Korea could go the way of Mexico and some other Latin American countries."

He pinpointed corporate governance as the most crucial issue in Korea's restructuring drive. He estimated that there would be a need for 2,000 independent directors in Korea over the next five years.

"I believe right now that just 150 people are qualified in terms of training and what directors are supposed to do," he said.

As a way to solve the shortage of "qualified" directors, he suggested that an institite be established in Korea which certifies directors. "That would be very beneficial not only for the corporations but also for the image of Korea and for the stock market and eventually, consumers," he said.

by Kim Hyun-chul