IMF Chief: South Korea needs service, labor market reforms

International Monetary Fund (IMF) Managing Director Christine Lagarde said here Thursday that South Korea needs to enhance its economic dynamism through service and labor market reforms. Speaking at a press conference, she said, "I am convinced ( South) Korea can enhance its economic dynamism by making its growth more broad-based and inclusive - less segmented and more welcoming of women - and making the services sector more dynamic, competitive and productive." Lagarde noted that a good reform must include temporary workers who do not have the benefit of ideal security, training, as well as young people and women, saying better child care benefits and vocational trainings for young people are needed. "Deregulation in the service industry should be taken place because it is much less productive than the manufacturing sector, which is parallel to none," she added. With implementation of the right package of reforms, she said, South Korea could keep growth at 3.5 to 4 percent over the next decade in spite of population aging. Lagarde said the fourth-largest economy in Asia is more resilient than it was five years ago at the start of the global financial crisis, as policymakers have used the time wisely to make sure banks have healthy capital buffers and lower short term external debt, while deploying macroprudential policies proactively to tame financial risks. During her visit beginning Wednesday, Lagarde met South Korean President Park Geun-hye, Deputy Prime Minister and Finance Minister Hyun Oh-Seok and other senior officials. Lagarde will then pay a two-day visit to Myanmar, wrapping up is her first tour to three Asian countries since she took office. The first leg of the visit brought her to Cambodia.