[VIEWPOINT]Liberalization’s growing pains

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[VIEWPOINT]Liberalization’s growing pains

The Organization for Economic Cooperation and Development (OECD), in its report entitled “Economic policy Reforms: going for growth” released March 1, recommended that South Korea pursue continuous economic liberalization. What was outstanding among measures discussed in the report was the overall expansion of benefits to foreign investors, which had been restricted to free economic zones.
The recommendation of the OECD is nothing special in itself. What makes it special is the situation in which even in free economic zones, freedom is not achieved properly. Construction of new Song-do city, a representative free economic zone, is making little progress because it is blocked by the voices of opposition to the project.
As the new Song-do city seeks to be the hub of commerce and industry in Northeast Asia, a developed infrastructure is indispensable. Particularly, hospitals and schools are a necessity. For their development, hospitals and schools should be able to find customers in the nearby community. But there are strong movements to restrict such basic freedom of hospitals and schools in the new Song-do city now. They contend that if our citizens use hospitals and schools in the new Song-do city, our society’s public school and health care system will be threatened. Their forecast may be right, but their idea is authoritarian and against the principle of liberal democracy. In addition, their argument amounts to denying the concept of free economic zones.
Free zones’ or free ports’ original aims were to remove the adverse effects of high tariffs and complicated customs regulations on trade. The beginning of free ports originated with the Hanseatic League, a commercial confederation of port cities in northern Germany that had prospered for almost four centuries since the late 12th century. In particular, Hamburg and Bremen had long prospered by capitalizing on the spirit of free ports. New York City, Singapore and Hong Kong have enjoyed prosperity as leading free ports.
Therefore, it is illogical and foolish to keep the benefit of liberalization of free economic zones from spreading across surrounding communities. The construction of a free economic zone is essentially a pilot project. Attempts at liberalization begin with a small place. Liberalization of the language market is the most important of all such pilot policies. If all languages freely compete, most people will use English that has become the global standard language. Therefore, common use of English means demolishing the exclusive position of the national language in the language market to liberalize the market.
Liberalization of the currency market is also an important pilot policy. As the dollar is the standard currency, probably, the dollar will become the basic currency in the free economic zone. It should be emphasized that this is not to change the basic currency from Korean won to dollar but a natural result of liberalization.
The more thoroughly we liberalize, the more free economic zones will prosper, and ultimately the more our society will benefit from them. It is an illogical and authoritarian argument that liberal policies should be held in check because liberalization of free economic zones threatens the established system.
The stumbling block to the progress of free economic zones at present is the problem of education. The required laws have not been prepared because of the assertions that our students should not attend the schools that will be established in free economic zones and that the remittance of profits from the schools should be restricted. Naturally, foreigners wishing to establish schools in free economic zones do not appear and no business will enter the zones where there are no schools. Blocking the education market from being liberalized violates the concepts and goals of a free economic zone. Essentially, these arguments mean depriving the freedom of choice of students, the consumers of education, and to put the interest of some class in the deformed system before the ordinary citizens’ welfare.
The spirit of nationalism is so strong in our society that liberalization cannot be easily achieved. This very situation gives strategic importance to free economic zones. The present government belatedly realized its mistakes and declared that it would devote itself to the recovery of the economy. If there is anything this government should take interest in first of all, then it is the development of free economic zones. Such development will be a driving force that is urgently required to pursue overall liberalization.

* The writer is a novelist. Translation by the JoongAng Daily staff.

by Bok Koh-ill
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