Action speaks louder than wordsThe government announced measures to bolster seven promising service sectors - healthcare and medical, tourism, education, content, financing, logistics and software. It plans to lift red tape to make it easier for foreign businesses and start-ups in these fields. The government hopes the liberalization can draw 15 trillion won ($14.58 billion) worth of new investment and create 180,000 jobs.
Some of the measures are radical. The liberalization of universities is eye-catching. Foreign universities so far have been restricted to free economic zones. But they can now join with domestic institutions. A well-known foreign university could receive benefits worth 40 billion won for the first five years if it opens a school here. Fast-track approval for commercial stem cell products, currently limited to domestic treatments, will be expanded.
But the market is not impressed. The business and industrial sectors are skeptical of when these 135 measures will go into effect. About 23 of them require approval from the legislature and many others have been mentioned before. Service sector measures are a hot topic for the government in its efforts to stimulate domestic demand. The former government under President Lee Myung-bak announced service sector measures seven times during its five-year term. President Park Geun-hye’s government has made three announcements on the services sector. There is nothing particularly new or impressive about the latest one. Also, the legislation will face significant hurdles due to opposition and interest group lobbying.
The new measures will face that same dreary process. Labor and civilian groups already strongly oppose medical institutions running subsidiaries related to tourism and travel. The law on protection and access to medical protection can raise privacy issues. Easier licensing to cable cars would face opposition from environmental groups.
The services sector is the economy’s last resort. Most new jobs in the past 20 years emerged in the service sector. Manufacturing jobs have decreased by 900,000 since the 1990s, but service jobs increased by more than 8 million. The government’s slogan to achieve an employment rate of 70 percent and propel growth with domestic demand cannot be possible without progress in services. The service sector is vital to creating jobs for young people.
Ministers must stake their seats on passage of these laws. They must persuade lawmakers, civilian groups and industry players. The services sector cannot grow and lead the local economy on mere rhetoric and promises alone.
JoongAng Ilbo, Aug. 13, Page 30