Service plan disappointingSeoul unveiled a measure to advance the service industry, but it’s turned out to be mostly hot air. The government did make an effort. Many parts of the plan have been improved. But important points are still missing.The government has repeatedly emphasized that the service sector must change. After he took office, Finance Minister Yoon Jeung-hyun said numerous times regulations in health care, education and other service industries must be eased to nurture the domestic market. Choi See-joong, the chairman of the Korea Communications Commission, said we need great business leaders like Lee Byung-chull and Chung Ju-yung in the media industry.
Developing the service industry further is President Lee Myung-bak’s key economic project, and comprehensive measures have been released four times since April 2008. Naturally, the people had high expectations. That must be why public employees have been working hard on the plan for four months, as the deputy prime minister in charge said. But the final result is disappointing.
Health care and education must be our first priorities. If the service sector was a chess game, the two fields are like a rook and a pawn. They may not be the most powerful sectors of the country’s economy, but they are vital. And right now they’re tied down with too many regulations that enforce a misguided egalitarianism.
That is why our service sector lags behind. Without these regulations, our service industry would be as competitive as Korean manufacturing. But the government’s devotion to equality over efficiency has stifled investment and competition. Thus, we believe that if the two fields progress the service sector’s other problems will be resolved easily.
But missing from yesterday’s announcement was how these solutions would come. The issue of allowing hospitals to pursue profits has not been resolved at all; Seoul said it would postpone it to November. The plan is a bit better on education. Foreign educational institutes are now allowed to send money back to their home countries if their schools in Korea make a profit. But foreign profit-making corporations are still not allowed to invest in Korean schools.
For an industry to be competitive and lead to economic growth and the creation of new jobs, investment and competition are most important. Anybody must be allowed to invest in hospitals, schools and media outlets and run businesses in those fields. Everyone knows that if for-profit corporations are not allowed in those fields, they will not become competitive. Gradual change will minimize negative effects. The issue will be left to ministries, but if they do not act by November, the president must then step in.