Deeper reforms in Korea will ensure more inclusive and sustainable growth

Moon Jae-in Korea United Nations 2017

UN Photo/Cia Pak Moon Jae-in, President of the Republic of Korea, addresses the general debate of the 72nd Session of the General Assembly.

This article is brought to you in association with OECD.

Short-term prospects for the Korean economy are good, with an uptick in world trade and fiscal policy driving growth, but productivity remains relatively low and the country faces the most rapid population ageing in the OECD area, according to a new report from the OECD.

The latest OECD Economic Survey of Korea looks at recent economic developments, as well as the challenges to ensure that the benefits are shared by all. The Survey projects growth of about 3% for the 2018-19 period, and lays out an agenda for ensuring broader-based and more inclusive growth going forward.

The Survey, presented in Sejong by the head of the OECD Korea/Japan Desk, Randall Jones, highlights the need for new policies to help the government overhaul the traditional export-led growth model and to promote innovation led by SMEs and start-ups. It discusses reforms to the large business groups (chaebols), to achieve higher productivity and more inclusive growth, and proposes policies to enhance dynamism in SMEs and boost entrepreneurship. It also outlines the key challenges for reaching higher levels of well-being.

“Korea has rebounded after several years of sub-par growth, and the expansion is expected to continue,” Mr Jones said. “However, the traditional economic model of manufacturing and export-led growth is running out of steam. The challenge going forward will be to develop a new growth model that addresses today’s economic and social polarisation and leads to a more sustainable and inclusive economy for all Koreans.”

Despite the important role of the large business groups in Korea’s economic growth, the Survey says that a more balanced economy with larger roles for services and SMEs would promote inclusive and sustainable growth. The Survey suggests that strengthening product market competition, by relaxing barriers to imports and inward foreign direct investment and liberalising product market regulation, would reduce rent-seeking behaviour by large firms. Corporate governance reform is also necessary.

Beyond chaebol reform, the Survey identifies measures that would enhance dynamism and productivity growth in SMEs, including regulatory reforms, better access to credit, changes to the insolvency framework and improvements to the vocational education system.

The Survey proposes a range of potential reforms to boost well-being in Korea, including measures to expand female employment; labour market reforms to break down the segmentation between regular and non-regular workers; policies to reduce elderly poverty; and the use of economic instruments to reduce greenhouse gas emissions and air pollution.

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Why this city is paying people to move there

These Dutch microgrid communities can supply 90% of their energy needs

Promoting Health in the Brazilian Amazon: one nation but many cultures

How dearly will Germany pay for the Volkswagen emissions rigging scandal

What next for Europe? Three (completely) different Davos views

Leveraging digital for high quality internships

These forms of exercise are best for your mental health

‘Multiplicity’ of rights violations in Ukraine as fifth winter of conflict bites

MWC 2016 LIVE: Ingenu steps up efforts to build LPWA networks across the globe

We dream of being a part of the European family, says FYROM PM

8 fascinating and fearsome frontiers of science you should know about

Youth not prioritised in new Commission

Climate change recognized as ‘threat multiplier’, UN Security Council debates its impact on peace

Benefits of rural migration effect often overlooked, new UN report suggests

EU Parliament says ‘no’ to austerity budget

Entrepreneur India Convention 2016: Bringing together Entrepreneurs, Investors, Startups and SMEs

8000 young people in the EP in Strasbourg: “a breath of fresh air for EU democracy”

The EU Diplomacy in North Korea promotes peace or war?

Who threatens the lives and livelihoods of Ukrainians?

EU/Africa, Caribbean and Pacific: towards which partnership?

Youth Parliament to finalise millennials´ priorities for future of the EU

Commission to decide on bank resolution issues

Digital Single Market: EU negotiators agree to set up new European rules to improve fairness of online platforms’ trading practices

EU budget deal struck with Parliament negotiators

Why sustainable packaging is good for profits as well as the planet

The end of the 404? Why we need to repair the internet’s crumbling infrastructure

Launch of Pact for Youth: European Youth Forum calls for real business engagement

The impact of mobile and rapid digital adoption on how India consumes

World Summit Awards 2016: Sustainable impact through digital innovation

Nagasaki is ‘a global inspiration’ for peace, UN chief says marking 73rd anniversary of atomic bombing

Greece returns to markets at a high cost to taxpayers, after four years out in the cold

Everybody for himself in G20 and IMF

Restoring prospect of peace in Middle East is ‘our shared responsibility’ UN envoy tells Security Council

What makes Copenhagen the world’s most bike-friendly city?

European Youth cries out: Sustainable Development Goals ambitious, but lack focus on youth

The ‘ASEAN way’: what it is, how it must change for the future

European Commission: Does Apple, Starbucks and Fiat really pay their taxes?

There’s a new global technology race. It needs better trade rules

Tax revenues continue increasing as the tax mix shifts further towards corporate and consumption taxes

How to stop data leaks

EU Budget 2019 to focus on young people

Farmers on the frontline in battle against drug-resistant microbes: UN health agency

Black Panther’s ‘General Okoye’ joins the fight against gender-based violence

These are the cities where people work the longest hours

Eurozone’s credibility rock solid

Will the French let Macron destroy their party political system?

These countries are leading the charge to clean energy

Extra mild ECB tapering of QE and zero interest rates keep euro low

Innovations for Content Professionals at the DCX exhibition 2018 in Berlin, in association with The European Sting

CHINA: five letters that could mean…

ECB intervenes to clean May’s and Schäuble’s mess

The Future of Retail: Changing shopping patterns will mean retailers need to invest in costly and complex solutions

Why climate change matters for future health professionals

Syrian Refugees in Germany face distinctly different challenges than those in Lebanon

ECOFIN: Choosing between the re-unification of Eurozone and a stalemate

A digital tax sounds like a great idea. Here’s why it might not be universally popular

Brexit and migration dominates the debate on October’s EU summit

Commission tries to solidify the EU statistical system

EU to fail 2050 Green targets due to lack of European citizens’ engagement

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s