[OUTLOOK]Cold, hard realities of life

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[OUTLOOK]Cold, hard realities of life

President Roh Moo-hyun once said, “I am neither pro-labor nor pro-business. I am pro-competitiveness.” It is proper that he should say that. The president was expressing his determination to concentrate on enhancing the competitiveness of the Korean economy without being biased toward either side. His words remind us of the desperate reality that neither laborers nor businesses can survive if we lose competitiveness in this age of unlimited competition.
Yet, a recently announced ranking of national competitiveness by the Swiss Institute for Management Development shows a picture far different from the Korean president’s determination. Despite his efforts under the name of reform to appoint fresh faces, numerous attempts to build a roadmap and to strengthen our competitiveness by pursuing changes in the economy, the Swiss institute’s evaluation is unflattering.
Among 27 countries with a population of over 20 million, Korea ranks only 14th in competitiveness. Competitiveness is not rated according to the living standards of the country. Countries that show a promising future get a high rank even if their present living standards are not high. The rankings showed Taiwan in fourth place, Malaysia in seventh, China in 10th and Thailand in 11th place. This time, even India outranked Korea at 14th place. This ranking by the institute takes the steam out of our big dreams about becoming the center or the hub of Northeast Asia.
It is interesting to note that the view of the Swiss evaluators is very different from ours. While the domestic atmosphere is usually critical of businesses, the institute’s evaluation praised Korean businesses. While domestic society seems to think that labor unions should have more power, foreigners say too-powerful unions are what’s making Korea’s competitiveness fall. This rating has made it clear how the outside world views Korea. It is a shame that we were ranking last in categories of labor-management relations and education. We are a country whose only resources are human ones. If we have the worst labor-management relations and education, what does that tells us about our future?
It is true that the evaluation was more or less business-oriented. It gave higher grades to countries with more business activity. In other words, a country where it’s easy to make money and has good investment conditions is a competitive country. This is not an opinion that is welcome in Korean society these days. Labor unions would probably accuse the institute of being a mouthpiece for businesses and forerunners of imperialism creating excuses to oppress the labor unions.
But the truth remains that the competitiveness of a country is ranked by how friendly an atmosphere it provides to businesses, foreign or domestic. Korea unfortunately falls in the category of a country where it’s hard to do business. Former President Kim Dae-jung had repeatedly vowed to make this a country where it was easy to do business. Very few people believed in his words at the time. Even fewer people will believe in similar words of President Roh Moo-hyun now. President Roh’s record shows him as being more radically hostile to businesses than Mr. Kim. He also has a support base that is imbued with anti-business sentiments.
Theoretically, the president, the government and the opposition seem to agree completely on making this a country friendly to businesses. But they also insist that businesses should come to their senses first. The recent attempts to revise the laws on temporary employment and fair trade regulations are part of that way of thinking. However, what’s important is what the businesses think. Even if the labor unions insist that this is a good country in which to do business, that opinion is useless unless businesses agree. It is business owners that decide whether this is a good or bad country to do business in.
The same goes for President Roh’s insistence that he is not nervous. It doesn’t matter what the president insists, because it is not the president who is being made nervous. It is the people. It is up to businesses whether they want to invest here or not. If the businesses say they are nervous, then they are nervous. And businesses only decide to invest when they feel comfortable and are more or less sure that they are going to make money. You can detain business owners for corruption, but you can’t force them to invest. It is in the businesses’ minds whether they want to invest or not. If we don’t like that, we should quit the free market. We should use this institute evaluation as our official grade in free market economics 101.

* The writer is the chief economic correspondent of the JoongAng Ilbo.

by Lee Chang-kyu
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