South Korea's national competitiveness dropped six notches in the world ranking this year, following a two-notch fall last year. The drop is mainly due to strained labor relations as exemplified in the protracted strike at ailing SUV maker Ssangyong Motor and political conflict at the time of survey.

The "Global Competitiveness Report 2009-2010" released by the World Economic Forum on Tuesday places Korea 19th among 133 countries surveyed, down from 13th place last year.

Singapore jumped from fifth place last year to third, and Taiwan, which at 17th ranked four places lower than Korea last year, rose to 12th place, five notches ahead.

Out of all 110 categories, Korea improved only in 21 including gross tertiary education enrollment rate (from third to first), government budget balance (from 30th to 28th), and utility patents (from seventh to fifth). The rank was unchanged in five categories and fell in the remaining 84.

The WEF said despite the recession, Korea performed well in innovation (11th) and market size (12th), but ranked below 100th place in cooperation in labor-employer relations and transparency of government policymaking.

In May, when the survey was conducted, the country was restless due to a strike by hard-line unions, and businesspeople surveyed must have given low marks for labor relations, the government speculates.

Korea ranks nearly at the bottom in categories to do with labor relations. It finished third from the bottom in cooperation in labor-employer relations, plummeting from 95th to 131st, and from 45th to 108th in hiring and firing practices. It also ranked low in most labor-related categories. The WEF stressed the need to improve labor relations and increase labor market flexibility so employers can fire workers more easily.

The political bribery scandal surrounding former President Roh Moo-hyun also apparently contributed to the low ranking. In public trust of politicians, Korea's rank fell by 42 notches from 25th last year to 67th this year.