&#91FOUNTAIN&#93A dinosaur in Korea’s future?

Ira Magaziner, a business consultant, could not control his anger when he visited Singapore in1974. He spent more than one hour at airport customs, he saw worms crawling out of a hole in a taxi seat. It took three days to make a phone call to the United States, and when he finally succeeded he was cut off a few words after “Hello.”
But after 10 years, Mr. Magaziner found that Singapore had changed. The world’s top multi-national corporations, like AT&T, Hewlett-Packard and General Electric, had built factories there. Shining new buildings filled the small city-state. Late model cars lined the streets. He talks about the changes in “The Silent War” written with Mark Pantinkin, an American journalist, in 1989.
When Singapore became independent in1965, the country, which lacks agricultural and mineral resources, had no economic basis. Its first prime minister, Lee Kuan Yew, concentrated the nation’s efforts on attracting foreign firms by creating conditions favorable to business and building a skilled labor force. The success of his policies led to Singapore’s reaching a gross domestic income per capita of $20,000.
Singapore is the world’s second most business-friendly country, according to research by the Cato Institute of the United States, and it is the second largest port in terms of freight handled after Rotterdam of the Netherlands.
But recently the city state has been in a slump. Economic stagnation continues; its growth rate in the second quarter fell to minus 4.3 percent compared with the same period last year. The rate was the lowest since the government started keeping statistics in this area. The more serious problem is that the Singapore economy is facing a fundamental crisis. Early this month, Time magazine of the United States pointed to China as the source of the crisis. Multi-national corporations, which accounted for 70 percent of Singapore’s industrial production and exports, are moving to the cities of China, such as Shanghai. Singapore’s unemployment rate, which used to be under 2 percent, jumped to 4.4 percent last year, and the number of people going abroad to find jobs is increasing. Goh Chok Tong, prime minister of Singapore, said the country will perish like dinosaurs if it does not change.
Consider this: The world’s second most business friendly country is suffering. Korea ranked 26th in the Cato poll.

by Lee Se-jung

The writer is a deputy business news editor of the JoongAng Ilbo.