Let’s decentralize authority

Kim Seong-ho

Russia has seized Crimea from Ukraine during a time of division and crisis. Even threats of isolation and sanctions, condemnations and international law couldn’t stop Vladimir Putin from claiming the Black Sea Peninsula for Russia. The Russian president was eager to use the momentum to recapture the post-Cold War glory of the Soviet empire.

Protecting people’s lives and property is the primary responsibility of the central government. The government builds defense at home and diplomatic power on the foreign front in order to defend the country and national interests. At the same time, it must ensure market order to allow an optimum environment for businesses to carry on with their economic activities.

Is our government safe? To kick off the deregulation campaign, the president had to sponsor a televised marathon debate to make headway in lifting red tape that has long been hampering advances in economic activities. Typically soft-spoken President Park Geun-hye appears to have lost patience in her second year in office, having seen little progress on North Korean affairs, deregulation and reforms in the public-sector and the public employees’ pension fund despite repeated nagging.

Why can’t the government move on its own initiative to remove the unnecessary red tape, come up with creative tasks and encourage bright public officials to employ their imagination and passion? If it can’t, I advise bureaucrats to at least not repeat the old habits of increasing organizations and manpower on the pretext of launching new projects without throwing away outdated regulations.

From the way it oversees ballooning debt in the public sector, one cannot help but wonder if the central government has any awareness of cost management. Budgetary squandering and redundant state projects are rampant. State-funded companies are brimming with corrupt employees and serve to accommodate retiring public officials. Naturally, government competitiveness cannot improve. The government should stop making excuses for inefficiencies in large public enterprises by citing their public role. Instead, it should let experienced and skilled entrepreneurs overhaul and run public enterprises to ease the burden on taxpayers.

There are some areas that are best left alone. Real estate policy is one of them. After the government announced it would levy taxes on income from monthly and long-term rents, the fledgling revival in the real estate market was instantly squashed. Real estate trade that had been comatose for the past six years has shown signs of recovery in recent months, but although the government meant to help, it only ended up throwing cold water on the market.

Measures to correct the rent market by inducing rental agreements to a less burdensome monthly basis should have come after the market recovered and stabilized.

What was more imperative was to normalize trade. The government announced ideas one after another as they came along without thinking through the ramifications and prioritizing the policies. Years of experience should have taught it that it cannot come up with customized real estate measures that satisfy everybody in every region. The market resists any bureaucratic taxing policy. This is why most advanced societies leave housing-related policies up to local governments, instead of enforcing single administrative action nationwide.

The central government is repeating failed policies because it is bestowed with too much authority. The Ministry of Strategy and Finance, for instance, is in charge of all policies related to budgetary spending - public finance, economic policy, overseas ventures and even local financial governance. The other central government offices - the Ministry of Land and Transportation, Ministry of Education and National Police Agency - also oversee affairs that extend to the jurisdictions of local governments. The central government interferes with administrative orders and budgets in the areas where local governments would can do better if left alone. There is little room for creativity and practicality.

The central government should hand over regional affairs to respective governments to ease its work overload. It can then better focus on areas requiring countrywide uniformity such as a national agenda, macroeconomic policy, finance, foreign affairs and security. This is the way to enhance government competitiveness. Local governments should perform as representative branches to serve the constitutional rights and interests of the people with rightful authority instead of serving as lower administrative branches of the central government. What the people want is a central government that excels and acts like a central government.

Translation by the Korea JoongAng Daily staff.

JoongAng Sunday, March 23, Page 30

*The author is a professor of Myungji University and executive director of policy and research office of the Governors Association of Korea.

By Kim Seong-ho