[EDITORIALS]Ease business regulationsNorth Korea’s nuclear crisis is truly worrisome to the economy. The growth rate for the third quarter was merely 0.9 percent compared to the second quarter. This is the second straight quarter with a growth rate below 1 percent. Experts say this trend will persist for a while. Consumption is particularly low. Private consumption in the third quarter rose by only 0.5 percent.
The government said that was because of damage from last summer’s floods, but that explanation is not good enough. If the growth rate is low in the fourth quarter, will the government say that was because the Chuseok holiday was too long?
Poor people and the young do not have money to spend because of a shortage of jobs. The middle class spends a considerable amount of money on educating their children ,so they have little money to spend on themselves.
The rich do not spend their money for fear of paying heavy real estate taxes. The government must know these tendencies lead to shrinking consumption. It does not want to admit the failure of its policies on welfare, education and real estate.
Lately, the government is talking about the necessity of boosting the economy. It is toying with the old cards of spending the budget earlier than planned and low interest rates. Whether the government really has a sense of urgency or feels pressed to revive the economy before next year’s presidential election, they are going down the wrong path again. In the past, these measures only produced side effects of mismanagement of the budget and bubbles in the real estate market.
Japan’s Abe administration is implementing corporate-friendly measures, including easing regulations on factories and pushing for reduced corporate taxes.
The United States is pushing for mitigating measures that put burdens on businesses, such as class actions. Easing regulations to attract investment and increase the number of jobs is the best way to boost the economy.
But the administration attempts to do things that will most likely be ineffective.
At the same time, it is about to put pressure on businesses by regulating circular investment. That is said to be more powerful than putting limits on the total amount of investment.
You don’t need to be an economic expert to predict that the economy will stay bad for a while. South Koreans face an arduous march because of the North’s nuclear test and its own bad economy.