27 November 2009: Korea Times
By Lee Hyo-sik
Staff Reporter
South Korea was rated Asia' eighth-freest economy this year, while North Korea ranks at the bottom among 41 economies in the Asia-Pacific region, the Heritage Foundation said Thursday.
The Washington-based think tank said Asia's fourth-largest economy received 68.1 out of 100 in its index of economic freedom, ranking eighth. Hong Kong topped the list with a sore of 90, followed by Singapore at 87.1 and Australia at 82.6. Worldwide, Korea ranked 40th out of 179 economies.
The foundation measures 10 components of economic freedom, assigning a grade in each using a scale from 0 to 100, where 100 represents the maximum amount of freedom.
The 10 component scores are then averaged to give an overall economic score for each country. The components are business, trade, fiscal, monetary, investment, financial and labor freedoms, government size, property rights and freedom from corruption.
``Korea's overall score dropped by 0.5 points from 2008, reflecting worsened conditions in labor and government size that offset slight improvements in business and trade freedom. It scored above the world's average in business, monetary, investment and financial freedoms, government size, property rights and freedom from corruption. The overall regulatory environment has gradually become more efficient and transparent,'' the think tank said.
It added government spending is moderate, despite recent increases over the past year, and that monetary stability is relatively well maintained. ``Also, Korea's rule of law is strong, and property rights are protected in a transparent manner. But its fiscal and labor freedoms are relatively weak. The labor market remains rigid despite recent efforts by the government to enhance market flexibility.''
Meanwhile, North Korea ranked last among Asian economies, receiving a score of only 2. Myanmar was second-to-last but its score was 37.7, substantially higher than that of the Communist state. The North was also found to be the least economically free among 179 countries worldwide.
In terms of political freedom, North Korea ranked at the bottom in Asia, while South Korea ranked ninth.
Citing data from the International Institute for Strategic Studies based in Britain, the foundation said North Korea is the most military-centered country in the world, with 4.71 percent of its population, or 1.1 million people, serving in the military.
South Korea ranked fourth in militarization with 1.41 percent of its population being military personnel.
MILITARY SPENDING
Sadly, the constant territorial and political conflicts among Latin American countries are resulting in rising military expenditures. Military spending in Latin America has skyrocketed by 91 percent over the past four years to nearly $47.2 billion last year, according to the London-based International Institute of Strategic Studies.
Latin American countries are also paying a high price in trade because of their mutual distrust. During a recent visit to Peru, a cabinet member was telling me that Peru is about to start exporting natural gas to Mexico while neighboring Chile is about to start importing natural gas from Indonesia. A border conflict between Peru and Chile is under international arbitration at the International Court of Justice in The Hague.
In Central America, five small countries each have their own currency and their own trade rules. A Guatemalan poultry exporter told me that it was easier for him to export from Guatemala to China than from Guatemala to neighboring Costa Rica.
What's worse, most Latin American countries don't even have agreements to allow tourists from other parts of the world to visit the region with one single visa.
CHINESE TOURISTS
The World Tourism Organization estimates that there will be 100 million Chinese tourists a year by 2020. But many tourism analysts agree that Latin America may miss the Chinese tourism avalanche because of visa issues: Many of the Chinese who will consider visiting Latin America will want to travel to more than one country in the region and are likely to get discouraged by the trouble and cost of obtaining several visas.
Something similar may happen for the 2014 soccer World Cup and the 2016 Olympic games in Brazil.
My opinion: Instead of making grandiose statements about the region's political and economic integration -- which are long on poetry and short on concrete deals -- Latin American leaders should follow the steps of the European Union.
The EU started more than five decades ago with concrete deals to trade coal and iron and later expanded these deals to many other products, freedom of movement across its borders and a common currency, before embarking nowadays on creation of a common foreign service and the appointment of a European President.
Latin American countries could start by issuing a common visa in time for the 2014 World Cup as a prelude to attracting an avalanche of tourists from other parts of the world and be prepared for the explosion of Chinese tourism a few years down the road. That would do more to reduce poverty in the region than a thousand speeches.
