[LETTERS to the editor]Don’t change what works

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[LETTERS to the editor]Don’t change what works


There has been much discussion on the proposal to transfer the governance of regional offices of the Small and Medium Business Administration (SMBA) from the central government to local governments.
The primary reason for the transfer is to prevent the overlap of work of the central government and local governments.
Some might think local governments would understand the concerns of small and medium-size companies in their regions better than the central government. But I believe the handover will significantly damage the efficiency of the government policies on small and mid-size companies and will not help the companies.
First, the government policies on small and medium-size companies are not just about providing assistance to the companies but are also related to the central government’s policies on other industries and the administration’s macroeconomic policies.
In fact, many problems that these companies face, such as the paucity of raw materials and [unpredictable] foreign currency exchange rates cannot be resolved by local governments.
Second, a company’s business is not limited to the region where it is located. If each local government manages each regional office of the SMBA, it would be very difficult to resolve a company’s problems originating outside its home region.
For instance, if a company in South Chungcheong Province has a dispute with a company in Seoul regarding unfair trade practices, it would take a long time or it might be impossible to resolve the conflict as two local governments are involved in the issue.
Third, the transfer will hinder the central government in reflecting the concerns of small and medium-size companies while devising policies on them. Currently, regional offices of the SMBA are in charge of collecting and reporting the perspectives of the companies to the central government.
Finally, as local government employees are regularly transferred to other departments, the employees would lack the expertise critically needed in devising policies on small and medium-size companies.
To assist the companies, officials have to have expertise in diverse areas including launching businesses, developing technology, financing, restructuring and more. Such expertise can be developed through the accumulation of a substantial amount of know-how, knowledge and experience.
Of course, officials at the SMBA are regularly transferred to other departments as well, but the difference is that all of their work is related to the business of small and medium-size companies.
In many developed countries such as the United States where the autonomy of local governments is broadly guaranteed, the central government governs the agencies that set up the policies on small and medium-size companies. This gives us another reason to reconsider the transfer of the regional office of SMBA from the central government to local governments.
At the same time, I think it is necessary to consider transferring parts of the SMBA’s regional offices’ work from the central government to local governments, if the local governments are able to do a better job in certain areas.
Kim Hong-ki, professor of economics,
Hannam University

*e-mail to eopinion@joongang.co.kr or via fax to 82-2-751-9219
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