Connect to share and comment
SEOUL, Jan. 19 (Yonhap) -- Bolstering business investment and deregulation are critical for South Korea to join the ranks of countries whose per capita GDP exceeds US$40,000, a report by the lobby group for the country's largest conglomerates said Sunday.
The assessment by the Federation of Korean Industries (FKI) based on data provided by the International Monetary Fund (IMF) claimed that the 22 countries that have made the "exclusive club" all had higher growth and employment rates and more developed service sectors compared to South Korea after their per capita hit the $20,000 mark.
The countries include industrial powerhouses the United States, Japan, Germany and France, along with city states like Singapore and some small resource-rich nations such as Kuwait, Qatar and Brunei.
"On average, the annual growth of these countries stood at 3.6 percent as they doubled their per capita income," the FKI said.
It pointed out from 2007, when South Korea's per capital surpassed the $20,000 mark for the first time, to the end of 2012, the country's annual growth averaged just 2.9 percent.
Seoul's per capita income posted $23,838 last year, and may climb to $25,189 this year, according to predictions made by the IMF in its latest World Economic Outlook report on 187 countries published in October.
The IMF expected Asia's fourth largest economy to reach the $30,000 mark in 2017, although this is contingent on Seoul pulling off 3.9 percent growth over the next three years.
The report noted that on average, those already in the $40,000 club made the leap from $20,000 in 13.4 years, and took 8 years to reach $30,000.
"The statistics clearly show that vitalizing the economy is a must (to reach $40,000)," said the lobby group.
It also said that the 22 top ranking countries had an average employment rate of 69.3 percent for people from 15 through 64 as they reached the $40,000 mark, while the comparable figure for South Korea in the 2007-2012 period stood at 63.6 percent.
On the industrial structure, the FKI said that the service sector made up 64.7 percent of GDP for the front-runner countries, while it stood at 59.2 percent for Seoul.
"Judging by all the data, the incumbent Park Geun-hye administration's goal of giving priority to pushing up growth potential to 4 percent, attaining 70 percent employment and building up key service sectors is definitely a step in the right direction," said Bae Sang-keun, head of the FKI's economic office.
He said that in order for the country to join the ranks of rich countries, South Korea must take every opportunity to encourage investments and dismantle unnecessary regulations that have been blamed for stamping out the entrepreneurial spirit of the business community and hindering timely investments.
<All rights reserved by Yonhap News Agency>
Copyright Yonhap News Agency, 2013. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.