The regional strategist at the Hong Kong office of the investment bank Salomon Smith Barney, Ajay Kapur, said that those leading the labor-business disputes are heedless of the need to increase the economic pie. Tomiyas Nakamura from the Seoul branch of the Japan External Trade Organization said that he doubted that the Korean government is competent enough to run the nation.

The Seoul Japan Club (SJC), comprising about 300 Japanese companies in Korea, said Tuesday that unless the problem of chronic labor strife in Korea is resolved, government efforts to stimulate the economy would be wasted.

The SJC submitted that day a list of 46 recommendations to the Ministry of Finance and Economy (MOFE), the Ministry of Commerce, Industry, and Energy (MOCIE) and the Ministry of Foreign Affairs and Trade (MOFAT) on improving Korea's business environment.

The SJC highlighted 11 recommendations on the list, including enforcing the no-work, no-pay policy, guaranteeing paid vacations every month, abolishing retirement allowances, cutting back on union labor, implementing strict regulations against illegal activities by labor unions, and improving the management transparency of labor unions.

Nobuya Takasugi, president of the SJC, said that this year the Korean government interfered with labor and management negotiations, including in the case of Doosan Heavy Industry, and resolved the disputes by siding with the labor unions. He criticized the current government's policy, calling it an obstacle to foreign investment.

The SJC also demanded that the Korean government normalize the relationship between labor and management by playing a fair and just role, improving the level of basic technology in order to attract Japanese industries, and enhancing its perks for foreign companies in Korea.

Norio Nakazawa from the Japan External Trade Organization (JETRO) office in Seoul said that due to the recent SK Global scandal and the increase in individual debts, Japanese investors are being cautious about investing in Korea. He also said Korea needs to continue its economic reform and not remain content with its achievements.

The SJC also urged the Korean government to open its legal system, operate flights between Gimpo Airport and Haneda Airport, issue W50,000 and W100,000 bills, and improve the process for recognizing foreigner registration numbers.

Dietrich von Hanstein, president of the Korean German Chamber of Commerce and Industry, said that he had not seen so many strikes during the four years he had resided in Korea. He disagrees with President Roh Moo-hyun's opinion that minor violence by labor unions can be tolerated even if it is illegal, he said. The economic situation is not in a crisis-state, but if necessary steps are not taken, it may soon be, he said.

Joseph Chung, professor of the City University of Hong Kong, said the labor strife in Korea is belligerent and ideological, adding that it makes you think that the labor unions ignore the reality of capitalism.

A head of a foreign investment company, who asked to remain anonymous, said that the Chohung Bank case confirmed that government policy is pro-labor, and that the new administration has no administrative ability.

Patrice Couvegnes, president of Credit Agricole Korea, said the current situation in Korea reminded him of France in 1981, when the leftist Francois Mitterrand was elected president. The Mitterrand administration suffered from various strikes and labor demands for two years until it kept its distance from labor and adopted realistic policies, Couvegnes explained.

An American official from a U.S.-based bank in Seoul said the current government has allowed all of the former administration's achievements crumble overnight. (Park Jung-hun, jh-park@chosun.com ) and (Song Eui-dal, edsong@chosun.com )