More than three in five EU executives say conducting business in trade-dependent South Korea — Asia’s fourth-largest economy — has become harder, a survey showed yesterday.
Respondents to the EU Chamber of Commerce in Korea (ECCK) cited rising labor costs, ambiguous rules, market access and inconsistent application of regulations as issues, urging more transparent policymaking and improved rule of law.
“Initiatives to support business, such as deregulation, seemed to have phased out,” the organization said in its Business Confidence Survey.
South Korean President Moon Jae-in came to power last year promising reforms in several areas.
However, “not much progress has been made in terms of substantial changes referring to improvements in business and international trade,” the group said.
A total of 108 company executives, representing a combined workforce exceeding 30,000 employees and a total turnover of 28 billion euros (US$34.8 billion), answered the survey in November.
The South Korean market was increasingly strategically important, 44 percent of respondents said.
However, 61 percent “feel that doing business in [South] Korea has become more challenging than two years ago,” the ECCK said.
South Korea’s overall economic growth — which reached 3.1 percent last year — has consistently ranked as the top business challenge since the survey was launched in 2014.
This time, 86 percent ranked it as highly or partially significant for their business, up from 74 percent.
Rising labor costs were named as a key challenge by 73.1 percent of respondents, followed by ambiguous rules and regulations with 69 percent.
Respondents were able to select more than one option.
Market access barriers and “discretionary enforcement” of regulations were new entrants in this year’s list of top five business challenges.
“The feedback from company leaders also states that efforts are needed to better the rule of law/transparent policymaking, fair competition and domestic consumption,” the ECCK said.
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