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[THE INVESTOR] A top International Monetary Fund on Aug. 12 called on South Korea to carry out sweeping reforms of the services sector.
“The South Korean economy has been steered by the manufacturing industry and has potential to become an economy led by the higher-level service industry,” Rhee Chang-yong, director of the IMF’s Asia and Pacific department, said in a lecture held in Seoul.
“But there are too many regulations and restrictions on the service sector.”
His remarks came after the South Korean government announced a set of plans last month to remove legal and administrative barriers on service businesses, and give them more tax benefits as a way to foster the local service industry as a new growth engine, while the country’s backbone manufacturing sector has been struggling for years amid faltering exports.
The IMF director said South Korea has to conduct industrial reform and cut red tape, as China is also accelerating the economic conversion.
“If South Korea keeps adhering to the current regulative mindset on the service industry, it will likely be outpaced by China before completing the manufacturing-to-service transition,” said Lee.
“China has a powerful leadership to push forward with its reform drive.”
He also advised South Korea to diversify its export portfolio to deal with a Chinese slowdown and a change in consumption patterns.
(theinvestor@heraldcorp.com)
“The South Korean economy has been steered by the manufacturing industry and has potential to become an economy led by the higher-level service industry,” Rhee Chang-yong, director of the IMF’s Asia and Pacific department, said in a lecture held in Seoul.
“But there are too many regulations and restrictions on the service sector.”
His remarks came after the South Korean government announced a set of plans last month to remove legal and administrative barriers on service businesses, and give them more tax benefits as a way to foster the local service industry as a new growth engine, while the country’s backbone manufacturing sector has been struggling for years amid faltering exports.
The IMF director said South Korea has to conduct industrial reform and cut red tape, as China is also accelerating the economic conversion.
“If South Korea keeps adhering to the current regulative mindset on the service industry, it will likely be outpaced by China before completing the manufacturing-to-service transition,” said Lee.
“China has a powerful leadership to push forward with its reform drive.”
He also advised South Korea to diversify its export portfolio to deal with a Chinese slowdown and a change in consumption patterns.
(theinvestor@heraldcorp.com)
