Friday, September 28, 2007

Korea's Corporate Environment Declines

Click on the pic to go to the Doing Business 2008 website

Hehehehehe...yes, I'm getting a mean spirited laugh out of this one.

I guess that I just can't let this one go.

In its quest to become an international hub of some sort, South Korea has managed to drop in the World Bank's ranking of the ease of doing business compared to other countries.

If you make it difficult then people are going to move on. I'm not going to establish a business here if you make it difficult.

Believe me, I had to call the gas company today about my bill. How many times do I have to call to have them delete an old bank account off of my damm bill? After trying to call in the morning I finally got through this afternoon to some utterly unhelpful dink. Knowing this is part of life here, I took a deep breath, found another number and, thankfully, found someone who could help me.

Now it's different as I'm a person calling about a gas bill for my apartment and not a business, but multiply that by a foreign branch of a company and I can't image where that ranks on the "pain in the ass" meter. Basically, it's too high up on the scale to warrant coming to Korea when it's easier to go elsewhere. Things get done here but Koreans seem not to understand that inefficiency will turn a Westerner off in a quick second. Now, I know there are issues back home too, but I'm not talking about the USA right now.

Make things difficult and businesses decide to go elsewhere. That also feeds into if you make living here difficult people will decide to take their businesses to a place where living is easier. It's just that when nations are compared Koreans start wondering why Korea isn't getting a big chunk of foreign direct investment...whatever.

Dang...why is that so hard to get and act on?

Korea's Corporate Environment Declines

Korea's corporate environment has worsened since last year, according to "Doing Business 2008", a report by the World Bank released Tuesday. South Korea fell from no. 23 in 2006 to no. 30 this year in terms of how easy it is to do business here.

Portugal undertook the most effective reforms for a business-friendly environment, the report says. But South Korea implemented no reforms that helped improve the corporate environment.

South Korea ranked 110th in Starting a Business, down nine places from 2006; 131st in Employing Workers, down one place; 64th in Protecting Investors, down two places; 22nd in Simplifying Licenses, down from 16th; 68th in Registering Property, down from 65th; 36th in Getting Credit, down from 32nd; and 11th in Closing a Business, down from 10th in 2006.

According to the report, 10 different stages are needed for a person to start a business in Korea, while it takes 17 days and 16.9 percent of per capita gross national income to start a business in the country. In contrast, the OECD averages six stages, 14.9 days, and 5.1 percent of per capita GNI.

For the second year running, Singapore topped the rankings, followed by New Zealand, the U.S., Hong Kong, Denmark, the U.K., Canada, Ireland, Australia and Iceland.

Honestly, Korea has some really good things going for it. But other countries do too.

Step up Korea, seriously.

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  1. Hey Expat Jane
    Another excellent blog. Yeah I knew this article would be too good to pass up LOL but I do agree with you. South Korea has a lot of potential to become a global leader in terms of foreign investments but they have to get past the mistrust of foreigners. All foreigners are not bad and you know you are off your game when New Zealand is in the mix and you are not.
    I mean all of the accolades and South Korea is first in this and that really doesnt do much if your standards are difficult for foreign investment. The places in Asia are Singapore and Hong Kong-even with Hong Kong and their air pollution problems. So hypothetically if you were President of South Korea what would you do to attract more foreign investments. I always like to hear it from another perspective. Thanks and keep up the good work. I loved that podcast with you and Michael the most recent ones about the academic scandal, it was a scandal.

  2. Thanks for the positive feedback on the last podcast. That call fromt hat reporter who was targeting MY advisor really mobilized me. That was one where I felt it was time to hit back real hard because to focus on foreigners when it was Korean after Korean stepping up to confess was bullshit.

    As for the "Doing Business 2008" report, I've got a lot of ideas but I'm not going to publish them here. In the spirit of capitalism, I want a consultant's fee ;) Plus, seriously, there are many levels of analysis and the full range of my opinions would be a pretty complex report (compete with a very nice Power Point presentation.)

    I think one important thing is centralizing the laws and procedures on opening and running a business. From what I know with foreigners doing business here, it really depends on the district office. One district can have a nice and cooperative boss but another can have someone who fears and loathes foreigners.

    Well, guess what happens then? Unpredictable and different treatment. Foreigners aren't going to venue shop like that and most wouldn't even know where to start to do that. Plus, the point is "ease" of doing business and it's not easy if you have to venue shop for the right district.

    It also means you have to be here for some amount of time. Someone simply looking to establish a presence in Asia is going to skip right over Korea once they realize just how difficult it is to set up shop here. I've lived here for awhile but still have problems with getting things done. I've stream lined a lot, but, still the "us vs. them" mentality really does inflitrate a lot of transactions.

    I know I'd move on if I were going to start my own business in Asia. If I had an idea and the accompanying funds for a business I'd probably leave Korea and would head straight to Singapore too.

    One thing is Koreans seem to look at it from their perspective and that blindness in their ability to step outside of the box really makes a negative inpact.


Hey there! Thanks for visiting my blog. It's my first blog, and I'm glad folks are still stopping by even though I'm no longer living in South Korea. Feel free to comment. If you want a personal answer, leave your email, and I won't publish the comment. Nasty comments and spam links will not be tolerated.