S. Korea should ease foreign ownership ceiling on network industry: OECD report

SEOUL, March 3 (Yonhap) -- South Korea should lower or scrap its foreign
ownership ceiling in network industries, including telecommunications firms, to
improve competitiveness and inject foreign capital, an international report
showed Tuesday.
In its annual report assessing structural reforms of member countries, the
Organization for Economic Cooperation and Development (OECD) said restrictions
hamper competition in those industries, and recommended more reforms to enhance
overall productivity.
"Restrictive product regulations limit competition in network industries,
contributing to the productivity gap between manufacturing and services, which is
the largest in the OECD area," the report said.
"(Our recommendation is) to lower or remove foreign ownership ceilings in network
industries, such as telecommunications, transport and electricity, to reap
benefits associated with inflows of foreign direct investment," the report added.
Seoul imposes a ceiling on the foreign ownership of network industries, which are
deemed vital for the nation's economy. Currently, foreigners are barred from
holding a stake exceeding 49 percent in major telecom companies.
kokobj@yna.co.kr
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