Shock-Like Reform Is Needed Again for Korea to Compete Globally

South Korea needs another economic overhaul like the one following the International Monetary Fund bailout in the late-1990s to stay competitive globally, according to a major global restructuring consulting firm, Bloomberg News reported. It’s as if Asia’s fourth-largest economy is being squeezed with a nutcracker, with China catching up to Korea and overtaking it in some sectors, while Japan is regaining its competitiveness as the economy recovers and it comes up with innovative technologies, said Yung Chung, Seoul-based managing director of AlixPartners LLP. Low productivity, high wages and overcapacity are hurting Korea’s corporate sector, he said. “Korea needs to go through restructuring 2.0 -- 1.0 was IMF,” Chung said in an interview. South Korea’s economic woes were highlighted in data last week that showed gross domestic product shrank the most in a decade due to declining investment, weakness in the technology sector and falling exports. Read more