[EDITORIALS]Officials’ happy talk is sadThe finance minister, Kwon Oh-kyu, and the Bank of Korea’s governor, Lee Seong-tae, have spoken with one voice over local companies’ infrastructure investments. Mr. Lee said companies need an “animal spirit,” in which they are ready to take risks and make bold decisions. Mr. Kwon said the major engine to fuel the nation’s economy is new job creation, stressing that the government would come up with “remarkable” deregulation policies by the end of September to revive corporate infrastructure investments. Their comments were made at a conference with local business leaders.
Certainly, what the two government officials said was not wrong. And it is also what the administration has been repeatedly saying since 2002. But none of this happy talk will make local companies invest more. What has this administration’s economic policy done except slap on more real estate taxes and suppress corporate activities? The administration said it would make efforts for deregulation but it actually just tinkered with a couple of non-major issues.
Meanwhile, it kept fanning tensions between the haves and have-nots and increasing market uncertainties. Now that the economy is in a dire situation, the administration has suddenly focused on entrepreneurial spirits and announced new deregulation policies, only to meet jeers from business leaders.
Mr. Kwon’s promise for “remarkable” deregulation policies sounds so hollow. Despite such rosy promises, Mr. Kwon still remained reluctant to change many regulations that have frustrated local companies, such as development restrictions in Seoul suburban areas and the ban on 30 major conglomerates from investing more than 25 percent of their net worth in other companies, including their affiliates. Excluding these two issues, what would be left in the upcoming “deregulation policies?”
The government needs to change its mindset that it should not touch the idea of reviving corporate investments and easing regulations, which are closely related to the current administration’s ideological principles. Otherwise, the government should not expect corporate investments to expand or more jobs to be created. Certainly easing such regulations would damage the current administration’s basic principles, such as equally developing regional areas or narrowing income gaps. But frankly, there are few Koreans who care about such issues. They just hope for more jobs to make their lives less difficult than they already are.