Globalisation through foreign direct investment (FDI), international trade and international movements of labour is a key force driving economic growth. Although Korea has become more integrated in the world economy over the past decade, it still ranks low in terms of import penetration, the stock of inward FDI relative to GDP and foreign workers as a share of the labour force. A number of policy reforms would help Korea make greater use of goods, services, capital and human resources from abroad: i) reducing barriers to FDI, including foreign ownership limits in some sectors; ii) focusing on attracting FDI by improving the business and living environment rather than through special zone schemes; iii) reducing import barriers, particularly in agriculture, through multilateral trade negotiations and WTO-consistent regional trade agreements; iv) relaxing product market regulations, notably in services; and v) easing controls on and facilitating the inflow of both low and high-skilled workers.
