South Korea 2011

Elections in South Korea are generally free and fair. The electoral process has constantly improved since 2002 and, even though contesting in an election is rather expensive, the influence of money-politics has declined in the last years. The president, who can only serve one term, is elected every five years. The members of the national assembly are elected for four year terms. Political pluralism and participation are strong in South Korea; several political parties contest in elections and there are also a great variety of active NGOs.

There are no veto players who lack constitutional mandate in the South Korean political system - civilian control over the army has been successfully established. Other influential groups do not carry much weight in politics in politics. However, government transparency remains comparatively low which, in part, may be contributed to widespread corruption.

The media is mostly free and unrestricted in South Korea. There are several privately owned newspapers that operate freely. However, the National Security Law punishes all actions that are perceived as favouring the North and, therefore, questioning the legitimacy of the South Korean state. This leads to a certain degree of self-censorship in order to avoid prosecution.

Nevertheless, the press in South Korea is significantly freer than in other countries in this region. In their 2010 index, Reporters Without Borders ranked South Korea at position 42 out of 178 - a great improvement in comparison to last year's result.

Even though the judiciary operates fairly unrestricted, there have been reports during the past few years which question the extent of judicial independence in South Korea. State prosecutors are occasionally urged to start investigations, e.g. on tax matters, in order to intimidate political opponents. In one case, Korean Supreme Court Justice Shin Young-Chul tried to influence lower courts during trials of protesters who, in 2008, had demonstrated against the import of US beef. On other occasions the South Korean judiciary has underlined its independence through remarkable rulings against the government, most notably in the case against a blogger who was accused by the government of "electronically spreading false rumours that damage the public good" and destabilising the

The South Korean government enacted an anti-corruption law in 2001, followed by a general code of conduct for public officials in 2003 and the establishment of the Independent Commission against Corruption. Still, extortion and bribes, of or by public officials, remain a widespread problem. A spectacular corruption case saw former-President Roh Moo- hyun being prosecuted for his involvement in dubious business deals. Despite the efforts undertaken by the government, corruption is still a serious issue in South Korea.

The overall human rights situation in South Korea is satisfactory. Still, there have been reports of inhuman, degrading, and unlawful detentions, even though these incidents seem to have happened only on a limited scale. The death penalty, although not yet officially abolished, is no longer executed.

Private property is well protected under South Korean law and expropriation is unlikely to happen. The courts can be slow in deciding on contractual matters, though. The protection of intellectual property rights, on the other hand, is deficient. Piracy of copyrighted material is not uncommon.

Government spending increased to 30 percent of the GDP. This can be attributed, in part, to fiscal packages that include targeted transfers to social support schemes, public investment in infrastructure, and credit guarantees for SMEs.

South Korea has a relatively high top income tax rate of 38.5 percent, and a top corporate tax rate of 22 percent. Other taxes include VAT and property tax. Overall tax revenue is about 26.6 percent of the GDP.

South Korea's financial sector is in the process of undergoing reforms which are aimed at improving transparency, efficiency and ending state-directed lending. As a result, the financial sector is becoming more competitive. The restructuring of banking during the past decade has resulted in weak institutions being merged or shut. Foreign banks own majority stakes in some large commercial banks, but there are restrictions regarding foreign ownership. The government has to some extent retreated from private banks, but still keeps some ownership positions. South Korean laws regulate the possibility to start, run, and close a business fairly well. It takes 14 days to start a business; getting a license can be done in 13 procedures and 34 days. Closing a business is an easy

On the path to further trade liberalisation, South Korea has negotiated FTAs with Chile, Singapore, ASEAN, and EFTA during the past couple of years. Furthermore, the government is pursuing agreements with the EU, the USA, and Peru.

Obstacles to foreign trade are prohibitive tariffs, import and export restrictions, complicated regulations, and adjustment tariffs and taxes.