"Korea Ranks 6th Among OECD Countries in Product Market Regulation"

FKI "Market Entry Barriers Must Be Removed and Distortions Caused by Government Intervention Minimized"

[Asia Economy Reporter Lee Hyeyoung] An analysis revealed that the South Korean government's regulation intensity on product markets ranks sixth highest among OECD countries.

The Federation of Korean Industries (FKI) announced on the 16th that according to the OECD's country-specific survey results, South Korea's Product Market Regulation (PMR) index ranked 33rd out of 38 OECD countries. This means that among the surveyed countries, South Korea has the sixth strongest regulations on product markets.

The PMR index is an indicator designed to enable comparison between countries regarding the regulatory status and market structure of product markets. The OECD has been publishing it every five years since 1998 based on country-specific survey data. A higher PMR index indicates a stronger level of product market regulation.

According to the survey, South Korea's overall product market regulation index was 1.71, showing a significant gap compared to the top-ranked United Kingdom (0.78). It was also higher than the average of the top five countries (1.0) and the OECD average (1.43).

South Korea's entry barrier index was also high at 1.72, ranking 35th out of 38 OECD countries. Lithuania ranked first with 0.57, the average of the top five countries was 0.68, and the OECD average entry barrier index was 1.21.

In South Korea's case, the effective tariff rate was also relatively high, resulting in a 'trade and investment barriers' index ranking of 37th. The 'service and network sector barriers' index was 36th, indicating high entry barriers.

Regarding the distortion index caused by government intervention, South Korea ranked 23rd out of 38 OECD countries with a score of 1.69, placing it in the mid-range. However, this was higher than the OECD average of 1.65.

In particular, among the distortion index evaluation items, the 'government intervention in corporate activities' index ranked 36th, placing South Korea near the bottom among OECD countries. The FKI analyzed that this means the government exerts strong price controls and uses strict regulations such as permits and prohibitions as policy enforcement tools rather than incentives.

Yoo Hwan-ik, head of the Corporate System Division at FKI, said, "South Korea has high entry barriers in the service and network sectors and severe government intervention in corporate activities," adding, "It is necessary to eliminate market entry barriers and minimize distortions caused by government intervention."

This content was produced with the assistance of AI translation services.