The deregulation challenge

The rhetoric of the president can set the tone for an administration and give a much-needed push to policies or priorities. President Park Geun-hye asked, “What exactly have past governments done?” With these powerful words, she settled a long standoff between the government and former President Chun Doo Hwan over the huge criminal fine he refused to pay for misdeeds during his military rule.

The president is careful with her words so they can deliver the maximum punch. She towers over the normally male-dominated worlds of politics with her powerful voice. She is a veteran in the use of the power of language to wield influence. It is her special recipe in surviving in the alpha-male realm of Korean politics. She announced that she will lighten the yoke that has burdened the small and midsize business sector all these years. The business sector believed her intention to remove layers of unnecessary regulations. But the job has been delayed.

Regulation represents bureaucratic power. Through regulatory authority, bureaucrats become the boss. They oversee as much as they can, from reviewing and licensing to administrative supervision and auditing. The receiving end remains at the mercy of their authority. It strives to please and pleads for mercy from authorities. Bureaucrats are not likely to voluntarily relinquish such mighty influence. That is why the yoke-relieving job has made little progress. The president’s voice has wavered slightly.

The keystone of so-called economic democratization is protection of the weaker party. The Park administration pledged to defend small and midsize enterprises, mom-and-pop shops and individual merchants against predatory large companies and franchise superstores. The government has poured out various regulations to ensure more equality and justice in economic activities - largely aimed at big corporations. But the benefits have not trickled down to the small business sector. Traditional markets and small merchants have not suddenly bloomed as a result of regulations and restrictions on department stores and superstores. In fact, an excess of regulations have emboldened the bureaucrats and made them giddy with more power.

President Park prizes bureaucrats. They are her army to march toward the goal of building a so-called creative economy. A truly creative economy has to be marked by bold challenges and an innovative, adventurous spirit. The rigid culture of a bureaucracy and a creative economy do not mix. In order to promote a creative economy, deregulation is the thing that’s essential. But regulating comes as second nature to bureaucrats. That is why we haven’t seen even baby steps toward the goal. The newly created Ministry of Science, ICT and Future Planning and its chief Choi Mun-kee, who is in charge of the president’s signature vision of a creative economy, came under fire during legislative questioning because of its poor progress.

The gaming industry is a centerpiece of Korea’s exports of content software. It is a key player in the so-called creative industries. But it is weighed down by multiple layers of regulations. The Korean game industry laments its position. Tourism was touted as a growth engine and employment generator during a conference chaired by the president herself. Other services - for-profit hospitals, multi-resort complexes, tourism hotels, legal services and education - also remain stuck in bottlenecks under piles of red tapes. When accidents occur at industrial sites, bureaucrats blame them on lack of regulations. So they draw up new ones.

A surfeit of regulations breeds corruption. Bribes are the easiest way to get around inconvenient regulations. Bureaucrats blame lawmakers for dragging their feet on deregulation and liberalization. But legislators have not been properly persuaded of the need.

Pledges about deregulation are repeated and recycled in every administration. According to the Hyundai Economic Research Institute, regulations that were newly created over the last five years totaled 1,650 compared to 183 that were removed.

On Oct. 26, it will be 34 years since the current president’s father, Park Chung Hee, was assassinated by his spy agency chief in his 18th year in office. I called former Transportation Minister Sohn Soo-ik. He was the late president’s prized talent. He spearheaded the Korea Forest Service for six years in the 1970s and is credited with the miracle of reforesting the war-devastated mountains. He helped to transform the country’s hillside and mountains. He knows something about getting things done.

I asked him if deregulation is that hard. His voice was clear and loud despite his age: “There is no reason why. It is possible if ministers go out to the field. They should mingle with bureaucrats and work out what regulations are unnecessary and redundant. All you need is conviction and action. Once reform starts in one place, it spreads.”

He recalled that all the bureaucrats during his time worked aggressively and passionately to achieve government goals. They were fired by patriotism and commitment - merits that are hardly noticeable among contemporary bureaucrats.

The memorial center of Park Chung Hee lays out achievements of the Saemaeul (New Community) Movement. One photo display has an explanation that reads, “Behind the success of Saemaeul Movement was a mood of rivalry.” The mechanism of rivalry could inspire bureaucrats and help lift regulations. Government offices should vie in deregulatory actions. Those who are active in deregulation should be rewarded with promotions, an increase in their budgets and staff and welfare benefits. Those who are not should be disadvantaged. Drastic actions are necessary or otherwise the slogan about thorn-removing will end up as nothing but rhetoric. Timing is important. Deregulatory initiatives should be taken in the early stage of an administration. Once power wanes, bureaucrats get lax.

Deregulation could be the president’s biggest achievement. Regulations cause bottlenecks that could hamper measures to build a creative economy, revitalize the economy, raise funds for welfare, democratize the economy and increase jobs for the young. A competent administration must simplify complicated work. Prioritization is important. The Park Geun-hye government should take up the challenge on deregulation and inspire commitment and loyalty from bureaucrats. It is time she exercise a will to “do something” during her time in power.

*The author is a senior columnist of the JoongAng Ilbo.

by Park Bo-gyoon