’Korea facing tough challenges due to its social divisiveness’

By Kim Tong-hyung

As bad as the economy looks now, this isn’t the biggest problem for Korea, which continues to fail to supply the glue for social cohesion, a government report suggested Wednesday.

In an annual report analyzing Korea’s national competitiveness in comparison to other industrialized nations Wednesday, the Ministry of Strategy and Finance concluded that while the country continues to punch above its weight economically, it may soon be facing considerable challenges stemming from its social divisiveness.

Of course, the explanations for the breakdown in genuine social integration are predominantly economic. Korea is becoming one of the worst places among rich nations for social mobility, with the widening income gap and soaring cost of higher education making it less likely for working-class children to climb the social ladder. The country is also struggling to integrate young people and women further into its workforce.

``Our country is faring well in the macro-economic realm identified by growth rate, fiscal health and foreign-currency debt. Our key weaknesses lie in integration, social capital and natural resources,’’ a finance ministry official told reporters at the Gwacheon government complex.

The ministry’s report was based on the evaluation of 259 indicators in the areas of economy, social cohesion, environment and infrastructure, where Korea was measured against other members of the Organization for Economic Cooperation and Development (OECD). However, it didn’t produce an overall competitiveness ranking among countries nations.

Korea’s gross domestic product (GDP) growth rate of 6.2 percent for 2010 ranked second in the table, up from fifth a year earlier, while its per capita GDP improved from 25th to 22nd. The country topped all countries in the pace of growth in labor productivity.

Korea’s most glaring problem appears to be inequality as the report confirms that the country has the worst rich-poor gap among developed nations.

Korea ranked 20th among OECD countries in equality based on the Gini coefficient, which is used to measure the concentration of wealth, based on official data for 2008, down from 17th the previous year. The country’s poverty rate was sixth highest in the table.

Korea ranked 30th among the 34 OECD nations in terms of economic activity among women, while its ratio of income paid to female workers was measured the lowest among 19 countries out of the group that were surveyed. It ranked 28th in youth employment.

Poor working conditions were also cited as a problem, with the country’s employees topping the table after submitting 2,193 working hours a year.

Korea also came in 28th out of 31 countries surveyed in terms of the level of press freedom. Among indicators related to the environment, Korea's ranking dropped in per-capita carbon emissions from 24th in the previous report to 28th. The ratio of fossil fuel consumption also increased here, with its ranking in the field dropping from 18th to 21st, the report showed.