[EDITORIALS]A drop in competitiveness

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[EDITORIALS]A drop in competitiveness

It is not surprising, in a way, that the World Economic Forum, in Geneva, Switzerland, downgraded Korea’s international competitiveness from 18th place last year to 29th this year.
Although it is unusual for a country’s competitiveness to drop 11 notches in a year, it is rather a natural outcome if we look back on the past year, tainted with such issues as the relocation of the nation’s capital, presidential impeachment, abolishment of the National Security Law and investigations into the past ― a noisy agenda but a far cry from the issue of national competitiveness.
Major factors behind Korea’s competitiveness drop are the deteriorating macroeconomic environment and the backwardness of its public sector. The ranking of Korea’s macroeconomic environment had deteriorated to 35th place from 23rd last year due to prospects for an economic recession, the credit crunch and waste in government expenditure. If we take a closer look, inefficiencies in the political sector, such as the low level of trust in politicians, an inefficient legislative branch and illegal political funds, held down Korea’s competitiveness.
The reality we face now is exposed: The economy felt by the public is even worse than during the financial crisis in 1997, and the public sector, which should revitalize the market economy, is still in a backward state. More worrisome is that Korea’s edge in technological know-how, which has supported national competitiveness so far, has declined to ninth place from sixth.
According to the World Economic Forum’s Global Competitiveness Report 2004-2005, Korean businesses count unstable government policies, inefficient bureaucracy and rigid labor regulations as difficulties that obstruct business activities. The nation’s competitiveness will be enhanced if these difficulties are removed.
We heard of such remedies repeatedly, but our society is still in the mire of political and social confusion. The current administration has fanned this confusion ― and the result is an 11-notch crash in a year.
President Roh Moo-hyun said recently that the role of government is solving the difficulties of businesses. Now, he has to back it up with action. The most urgent task is removing the opacity in our society. By clearing the political and social confusion as soon as possible, if a predictable business environment is created, national competitiveness will revive.
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