Government claims deregulation progress
Cites World Bank study on rise in Korea’s global rank
The Ministry of Knowledge Economy said yesterday that regulatory reforms under the Lee Myung-bak administration have led to an improvement in business conditions, including job creation and increased investments.
“During the first half of the president’s term, some 160 regulatory reforms have been made” and “in general, administrative processes have become more simplified,” the ministry said.
“The reforms have brought economic benefits in many different areas, including reducing regulatory burdens on companies, increasing private investment and cutting budget costs and expenses,” the ministry added.
The ministry said these improvements were reflected in the latest annual “Doing Business” report by the World Bank, which surveys business conditions in a number of countries.
Last year, Korea ranked 19th, up from 23rd in 2008, the first year of the Lee administration, and 27th in 2005. The World Bank noted that Korea had made the most progress last year when it came to starting a business, in which the country rose from 133rd place to 53rd.
Among the policies that have led to improvements in business conditions, the ministry cited expanding the supply of rental homes for foreigners within the free economic zones and support for new growth engine industries.
In addition, foreign components manufacturers are given a 50 percent cut in rental fees within the FEZ for investments under $5 million, and 75 percent above that amount.
The government has targeted components as a growth industry. The ministry said the cut in rental payment was the most competitive incentive for foreign components companies.
Regulations governing the export and import of crude oil have also been eased. In 2006, 15 oil trading companies were registered in 2006, while the number increased to 19 last year.
However, the World Bank’s “Doing Business” report said that Korea’s global ranking in a number of areas had slipped last year, including employing workers (150th), registering property (71st), getting credit (15th), protecting investors (73rd) and paying taxes (49th).
It noted improvements, besides starting a business, in the areas of trading across borders (8th) and enforcing contracts (5th), with no change in dealing with construction permits (23rd) and closing a business (12th).
The ministry said it expected more progress on the reform agenda in the second half of the Lee administration.
By Lee Eun-joo [email@example.com]