current status of national competitiveness 5-year vision for national competitiveness policy...
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Current Status of National CompetitivenessCurrent Status of National Competitiveness
5-Year Vision for National Competitiveness5-Year Vision for National Competitiveness
Policy ImplicationsPolicy Implications
The Way Forward: A Small & Strong Gov.The Way Forward: A Small & Strong Gov.
Current Status of National CompetitivenessCurrent Status of National Competitiveness
5-Year Vision for National Competitiveness5-Year Vision for National Competitiveness
Policy ImplicationsPolicy Implications
The Way Forward: A Small & Strong Gov.The Way Forward: A Small & Strong Gov.
Ⅰ-1. IMD World Competitiveness RankingsⅠ-1. IMD World Competitiveness Rankings
Coverage: 55 countries in 2008
Assessment:
Four factors of competitiveness
Economic Performance, Government Efficiency,
Business Efficiency, Infrastructure
331 criteria (208 statistical criteria, 123 survey data)
* 77 out of 208 statistical criteria are for background information only
2008 Rankings
Korea Japan China TaiwanHong Kong
Singapore
31 22 17 13 3 2
Ⅰ-2. Trend of Korea's National CompetitivenessⅠ-2. Trend of Korea's National Competitiveness
Infrastructure
Overall
BusinessEfficiency
GovernmentEfficiency
EconomicPerformance
Ranking
Year
Ⅰ-3. Sectoral Weaknesses in Korea's CompetitivenessⅠ-3. Sectoral Weaknesses in Korea's Competitiveness
FactorEconomic
PerformanceGovernment Efficiency
Business Efficiency
Infrastructure
Overall Ranking 47 37 36 21
Statistical Criteria
-Cost of living (55)-FDI (% of GDP, 54)-Tourism receipts (% of GDP, 52)
- - -Pupil-teacher ratio for primary
education (50)
SurveyCriteria
-Labor regulations (54)-Immigration laws do not prevent foreign labor employment (54)-Legal and regulatory framework (53)-Public sector contracts open to foreign partners (53)-Price controls do not affect pricing of products (53)
-Labor relations (55)-National culture open to foreign ideas (55)-Corporate boards supervise the management of companies (54)
-Technological regulation supports business development and innovation (55)-University education meets the needs of a competitive economy (53)-Environmental laws hinder businesses (50)
Korea's Weaknesses by 4 factors of competitiveness(out of 55 countries covered in 2008)
Current Status of National CompetitivenessCurrent Status of National Competitiveness
Policy ImplicationsPolicy Implications
5-Year Vision for National Competitiveness5-Year Vision for National Competitiveness
The Way Forward: A Small & Strong Gov.The Way Forward: A Small & Strong Gov.
II. 5-Year Vision for National CompetitivenessII. 5-Year Vision for National Competitiveness
Status Quo : Maintain Current Development Trend
Take-off : Implement Unreserved and Fundamental Reform
Ranking in 5 years
GovernmentEfficiency
BusinessEfficiency
Economic Performance
InfrastructurePotential
growth rate in 5 years
28Gain 5 ranks
Gain 5 ranks
Gain 2~3 ranks
Gain 2~3 ranks
4.2%
Ranking in 5 years
GovernmentEfficiency
BusinessEfficiency
Economic Performance
InfrastructurePotential
growth rate in 5 years
15Gain 30 ranks in
weak areas*regulation, etc
Gain 30 ranks in weak
areas*labor relations,
etc
Gain 20+ ranks
Gain 5 ranks
6~7%
Current Status of National CompetitivenessCurrent Status of National Competitiveness
Policy ImplicationsPolicy Implications
5-Year Vision for National Competitiveness5-Year Vision for National Competitiveness
The Way Forward: A Small & Strong Gov.The Way Forward: A Small & Strong Gov.
III-1. Unreserved deregulationIII-1. Unreserved deregulation
Realignment into a system of‘good regulations’
- Achieve regulatory objective + Reduce regulatory costs
* Total regulatory costs in 2007 (SERI Proj.) : KRW78.1 trillion (8.7% of GDP)
Key regulations by sectors have been reformed until the 4th meeting of the PCNC
- Opening a new business: improved opening process- Financial sector: set basic directions for financial deregulation and
improved entry regulations- Land, sites: reformed regulations regarding industrial complexes,
reduced prices for industrial complex sites- FDI: Promoted FEZs- Foreign labor: Expanded efforts to attract global skilled labor force- Business environment: Alleviated on-site problems of
manufacturing SMEs
• Rule of law is a key factor of social capital → serious effect on economic growth
• Korea's rule of law is at the lowest level among OECD countries: negative effect on the economic growth rate by 1%p (KDI)
• Recent candlelight demonstrations : Direct costs of KRW 570.8 billion, Indirect costs of KRW 1.352 trillion (KERI)
• First, foster a law-abiding environment
• Establishment of a‘good regulations’framework through regulatory reform • An effective conflict management system also needs to be established
• Next, strict law enforcement on illegal actions → Advancement in law and order
* Analysis of Korea's demonstrations and protests(1989∼2003) show that demands through illegal demonstrations (29.1%) were more likely to be attained than through legal demonstrations(25.2%)
→ Incentives for illegal demonstrations remain
III-2. Advancement of Law and OrderIII-2. Advancement of Law and Order
Korea's size of government:
small among OECD members,
but increasing rapidly - Continued pressure for public sector expansion is expected taking into account rapid population aging and increasing demand for welfare
Public sector innovation is essential in establishing a sustainable foundation for economic growth
- Continued devolution of manpower, organization, and functions to the private sector
* Government : Deregulation + Outsourcing → Small Government * Public Entities : Privatization, Restructuring → Enhanced efficiency and service
- Limiting increases in the size of public finance
III-3. Public Sector InnovationIII-3. Public Sector Innovation
Trend of total tax burden ratio (%)
OECD Average
Total Tax Burden (Incl. Quasi Tax)
III-4. Cooperative Labor RelationsIII-4. Cooperative Labor Relations
Corporate social responsibility
- Transparent corporate governance and strengthened noblesse oblige are prerequisites to strict law enforcement and cooperative labor relations
An advanced institutional framework to establish peaceful labor-management culture
- Recently, labor disputes and lost work days are on the decrease
- To foster a cooperative labor-management culture, an law and principle-based environment is needed
Put an end to unfair labor practices Adhere to the‘no work, no pay’principle Institutional advances such as long-term collective agreements
* Duration of collective agreements : Korea(2 years max.), Japan(3 years max.), France(5 years max.), US(2∼3 years)
Labor disputes (no.)
Lost work days
III-5. Strengthened Policy PRIII-5. Strengthened Policy PR
Significance of strengthening policy PR and public communication
* In 2008 IMD World Competitiveness Rankings: Statistical criteria ranking (23) vs. business survey ranking (36) → Overall ranking: 31
Active PR efforts though various channels and methods are needed to reach policy customers
- Increase PR though media such as TV, newspapers, and internet portals
- Strengthen customized PR (Policy Customer Relationship Management)
Current Status of National CompetitivenessCurrent Status of National Competitiveness
National Competitiveness in 5 Yrs: 2 ScenariosNational Competitiveness in 5 Yrs: 2 Scenarios
Policy ImplicationsPolicy Implications
The Way Forward: A Small & Strong Gov.The Way Forward: A Small & Strong Gov.
IV. The Way Forward: A Small & Strong GovernmentIV. The Way Forward: A Small & Strong Government
60 -
50 -
40 -
30 -
------
0.5 1.0 1.5 2.0 2.5 3.0
Current Trend
0.5 1.0 1.5 2.0 2.5 3.0
Target Path
Small & Strong Gov.
① Regulatory reform② Public sector innovation③ Cooperative labor relations
□ Current trend of Korea’s public expenditure and regulation (Yellow Path)
□ Achieving the ’Take-off’(Mid-Expenditure, Low Regulation) Scenario (Red Path)