[EDITORIALS]Stop inhibiting growth

Korea’s government yesterday rolled out an extensive policy package to improve the business environment. Finance Minister Kwon O-kyu boasted three months ago that the government would introduce “surprising” deregulation policies to create a business environment like that of advanced countries, and this is the result of the work. The package has many policies, such as providing financial aid to small new start-up businesses in local regions, but we see no revolutionary policy changes.
It looks as if the government was forced to churn out a number of insignificant measures in order to boast that they are doing something great while leaving the two most important issues literally untouched. Now the government will be embarrassed to see the “revolutionary deregulation” it once promised has offered nothing substantial.
Uri Party chairman Kim Geun-tae will also face significant political embarrassment, as he had constantly pledged the government would “dramatically” embrace the demands of local companies.
Hynix Semiconductor has hoped to expand its existing semiconductor plants in Icheon, Gyeonggi province, by spending nearly 14 trillion won ($14.8 billion) and hiring 6,000 more workers. But the government is urging the company to open the plants in Cheongju, North Chungcheong province, instead. Hynix Semiconductor is unwilling to do so, as such a move will cost the company an additional 500 billion won. Kia Motor also hopes to expand its production plants in Gyeonggi province, because overseas sales of its flagship Pride model are growing. But the government did not even bother reviewing the plea. What kind of government stops companies from expanding their investments and hiring more workers? It is impossible for the government to fulfill its promise to create a business environment in the world’s top 10 while maintaining such anti-corporate policies.
The Korean economy is increasingly losing its vitality, as the number of new companies and plants have been steadily declining since 2004, while key manufacturers such as automakers and metal companies are moving their production bases overseas. Nearly 75,000 jobs were slashed in the local manufacturing sector during the first half of this year. The government cannot afford the luxury of barring companies from opening new plants. Now it is not too late for the government to embrace local enterprises’ pleas, as long as they can create new jobs and revive the economy.