Thursday, March 16, 2006

Korea Political Factors II

The impact of internal political factors on business environment of South Korea

1. President Kim Dae-jung was elected President in December 1997 at the height of the Asian financial crisis. He promised sweeping economic and political reform, transparency in business practices, and further liberalization in trade and investment. Much of that agenda has been implemented, including legislative changes to promote labor flexibility, corporate transparency, and capital market liberalization.

2. In the National Assembly, President Kim initially fashioned a narrow working majority made up of his ruling Millennium Democratic Party and two smaller parties. This coalition, which facilitated the passage of important legislation, eventually dissolved, and the Millennium Democratic Party is now in the minority in the Assembly.

3. Major clashes with labor have been avoided. Labor has, however, criticized the Korean government’s economic reform program, and there has been some labor unrest -- most recently evidenced by strikes by electrical and railroad workers opposed to privatization.

4. Since South Korea is now using a democratic electoral system, the elected president / government must get support from most of the citizens, the capability of the president / government to drive the economy and maintain the society stability are definitely key factors of winning the election. In such a situation, there is strong reason for Roh Moo-hyun (belongs to Uri Party which stress on making South Korea a more prosperous Nation, a society that cares and maintaining peace on the Korea Peninsula) to win the recent election.

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