The Organization for Economic Cooperation and Development (OECD) urged South Korea yesterday to press ahead with structural reform to put its economy back on a stronger growth track.
Donald Johnston, secretary general of the Paris-based grouping of industrialized states, told a seminar that South Korea's economic activity has shown a marked deceleration this year due to weaker consumption and slow output growth.
The timing of a resurgence in growth will depend on external events beyond South Korea's control and on its continued sound economic management, he said.
"Sustaining such a high growth rate will require continuing structural reform," Johnston said.
Macro-economic policies alone cannot sustain strong growth, he said, adding that structural policies are required.
"Ensuring the successful implementation of the post-crisis reform agenda will help South Korea maintain high growth rates over the medium term," he said.
He said South Korea should create an environment suitable for international business to attract more foreign investment.
"Reforming regulations and improving industrial relations will attract foreign direct investment, helping Korea to develop into an international business hub."
In response, President Roh Moo-hyun said in a key-note speech that South Korea would accelerate reform, enhance corporate transparency and accountability, and ease restrictions on investment.
South Korea is on course for liberalization and globalization, Roh said, pledging to increase foreign investment to 14 percent of GDP by 2010.
"We will also take measures to adopt international standards in labor-related institutions and practices, flexibility in employment and protection of the rights and obligations of laborers," Roh said.