Friendly to Companies
The World Bank (WB) ranked Korea fourth, the highest ever, in the standings of business-friendly nations. But the WB’s assessment items missed the labor sector, which makes some experts criticize that Korea’s standing is far from being true. A business environment assessment announced by the WB on Oct. 27 raised Korea up to fourth place by one notch among 189 nations from last year.
Back in 2009, Korea sat at 19th, but since then its rank has risen. This year’s scorecard says that Korea is the highest among G20 nations. The WB placed Singapore and New Zealand first and second, each. Denmark held third place. The U.S. came in seventh, while Japan came in 34th. China stood at 84th. The assessment was conducted in ten items from startups to closedowns based on the lifecycle of a corporation.
The items include the number of procedures before a startup, time needed before the startup, the number and time of tax payments and time needed for the closedown. In the details, Korea outclassed other nations to be number one in electric power supply.
In terms of the protection of mum-and-dad investors, Korea jumped to eighth place from last year’s 21st place. Korea also climbed up to the second spot from the fourth spot in terms of legal settlements. But Korea slid to 42nd place from 36th in light of fund-raising, and to 29th place from 25th in light of tax payments. In the building permit category, Korea also fell to the 28th spot from the 12th spot.
But some point out that this survey’s results are out of touch with reality. They say that the particularly radical labor unions in Korea and various kinds of regulations force foreign companies to leave Korea, and job flexibility, labor-management relations, and the degree of regulations make even Korean companies turn their eyes to overseas countries. “But such matters were not included in the assessment items,” they said.
“The rank is the result of a little improvement in the corporate business environment in terms of systems, thanks to the current government’s drive for structural reforms,” said Bae Sang-keun, the deputy director of the Korea Economic Research Institute. “The assessment items are devoid of the biggest trouble for companies, so the rank is far from what companies really feel.”