Shaky industrial relations no. 1 barrier to doing biz: foreign entrepreneurs

Although foreign managers here think that the labor situation in Korea has improved considerably since the foreign exchange crisis, they still experience problems with respect to unstable industrial relations and irrational business practices.

According to a recent Korea Chamber of Commerce and Industry (KCCI) survey of 42 chief executive officers (CEO) at foreign-invested companies active in Korea, 85.7% of respondents feel that investment and managerial conditions have improved since President Kim Dae-Jung took office in 1998.

However, about 40.5% of those polled cited labor-management relations as the biggest roadblock they faced in doing business here, followed by irrational business practices (23.8%), policy inconsistencies (16.6%) and government regulations (9.5%).

Asked for positive aspects of the Korean economy, 37.5% of pollees cited reductions in the debt ratios of local enterprises while 25.0% noted improvements in their Bank for International Settlements (BIS)-suggested ratios. But 26.8% of respondents said Korea`s public sector reform efforts were incomplete and that the labor market remained inflexible.

Park Won-Jae parkwj@donga.com