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Prices in major cities in South Korea are 20 percent higher than those in New York, Chosun Ilbo's analysis on Sunday of the World Competitiveness Yearbook 2008 by the International Institute for Management Development in Switzerland finds.
In the report, South Korea ranked lowest with 122.4 points among the 55 nations covered in the cost-of-living index (as of 2007). This is a price index that measures relative cost of living over time with New York set as the mean value or base of 100 with which the costs of commodities, services and living are then compared.
Korea¡¯s cost-of-living index of 122.4 means Korean consumers pay over 20 percent more than New Yorkers for identical commodities or services. Korea's cost-of-living index is over 40 percent higher than the average 86.3 of the 55 nations.
The Samsung Economics Research Institute, the IMD's partner in South Korea, said the comparisons were made by reflecting actual standards of living. Sohn Min-jung, an SERI analyst, said, "The high price level, including the cost of living, caused Korea's overall competitiveness ranking to drop. The government urgently needs to address the current high-cost structure of the economy."
An official with the Ministry of Strategy and Finance said, "It seems housing expenses caused the overall cost of living to rise, considering that consumer prices were stabilized last year."
In a questionnaire for CEOs on productivity of labor relations, Korea also ranked lowest with 2.97 points in the IMD survey, much lower than the average 6.08. Korea also ranked lowest in the category for openness of the national culture to foreign ideas.
In terms of support of technological regulation for business development and innovation, Korea plummeted to the bottom, down 37 notches from last year. This shows Korea urgently needs to ease regulations on technological infrastructure.
Foreign direct investment in Korea last year was $1.58 billion, 1/17 of the average amount $25.6 billion and pushing Korea's ranking to 52nd. The country ranked 54th in the portion of foreign investment in GDP, showing again that regulations on the field need drastic cutting.
Korea ranked 52nd in gender equality, showing just how far the country still has to go to improve treatment of women.
The IMD put Korea 31st in overall competitiveness this year, down two notches from 2007. It ranked eighth among 10 Asian nations, behind Malaysia and Thailand.
(englishnews@chosun.com )
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