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South Korea ranks 29th in competitiveness among 55 nations and regions this year, up three notches from last year, in rankings by the International Institute for Management Development released Wednesday. The Swiss institute annually ranks countries in terms of competitiveness in the "World Competitiveness Yearbook.¡± The IMD said South Korea inched up due to an improvement in government efficiency by 10 notches, from 41st in 2006 to 31st in 2007. The U.S. ranked top for the fifth consecutive year. Singapore and Hong Kong ranked second and third.
A Finance and Economy Ministry official said the IMD ¡°relies a lot on surveys of domestic businesspeople for its ranking, so it may have been impressed by the Korean government's proactive attitude in concluding a free trade agreement with the United States." He said the government probably also won points due to increased foreign exchange holdings and relatively lower taxes than advanced countries.
But Korea tumbled 13 notches in economic performance, from 36th to 49th, reflecting businesspeople's recession concerns. The IMD gave Korea¡¯s economy a poor rating due to high prices of daily necessities and a low ratio of foreign direct investment to GDP. Last year, Korea ranked 32nd in global competitiveness, down five notches from 2005 (27th).
The IMD classified the 55 nations and regions into one group of 40 which are "closing the gap" with the U.S. and a group of 15 that are widening it. Korea is at the lower end of the first group. The frontrunners are China (15th), Russia (43rd), India (27th), Slovakia (34th), Estonia (22nd), Sweden (ninth), Austria (11th), Australia (12th), Denmark (fifth), Switzerland (sixth) and Hong Kong (third). The institute predicts the rankings will soon change as the competitiveness of these countries improves. The group of 15 widening the gap with the U.S. includes Indonesia (54th), Italy (42nd), Argentina (51st), Brazil (49th), Mexico (47th), Turkey (48th), the Philippines (45th), and France (28th). Although they are still competitive in certain sectors, some will fall behind others unless they carry out thoroughgoing restructuring.
The U.S., Singapore and Hong Kong once again took the three top positions. Singapore and Hong Kong compete neck and neck, switching positions in 2006 and 2007. Their high ranking is mainly due to government efficiency, where Singapore and Hong Kong ranked first and second. Last year, it was the other way round. Luxemburg (fourth), Denmark (fifth), Switzerland (sixth), Iceland (seventh), and Canada (10th), most of them small but strong, were also in the top 10.
Sweden and Germany, which are implementing market reform policies after center-right governments took power, stood out in the country rankings. After taking power last September, a coalition of center-right groups in Sweden is revamping the northern European welfare model. Sweden jumped from 14th in 2006 to ninth in 2007. Germany led by Chancellor Angela Merkel, who won the general election in 2005 and leads a centrist grand coalition, jumped nine notches, from 25th in 2006 to 16th.
(englishnews@chosun.com )
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