Deregulation isn’t working

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Deregulation isn’t working

The government’s deregulation drive has a long way to go. According to a Korea Development Institute (KDI) survey of 300 local companies, their satisfaction with deregulation was well short of expectations. Though the rate has been raised to 2.92 points on average - a slight increase from a year earlier - it still hovers below the usual three-point level.

Dissatisfaction prevailed across categories as well. Even through companies’ satisfaction rate (3.04 points) with the government’s deregulation has barely exceeded the limit, companies were dismissive (2.87 points) of the results of the government-led deregulation drive. Especially when it comes to such practical issues as the government’s follow-up measures, communications with the corporate sector and government employees’ attitudes toward deregulation, the scores were even lower: 2.79, 2.75 and 2.58, respectively.

That raises strong skepticism over whether the deregulation campaign can be advanced further. The fact that companies had such unfavorable perceptions of deregulation - despite President Park Geun-hye leading a seven-hour debate on the issue with businessmen in March 2014 - bodes ill for our economy.

Facing tough challenges at home and abroad - depressed domestic consumption and exports on the one hand and jitters over China’s economic slowdown, the Fed’s raising of interest rates, a weakened yen and the Greek crisis on the other - our economy has gloomy long-term forecasts. The KDI expects our growth potential to plummet to 1.5 percent by 2035 from the current 3 percent after a gradual decrease over two decades. To make matters worse, Korea’s low birth rates and fast aging of its population will discourage domestic demand. Squeezed between China and Japan, the economy has trouble finding a new growth engine to replace semiconductors and automobiles. That’s where deregulation was supposed to kick in. If we can’t grow the economic pie, we must drastically lift unnecessary regulations to raise our growth potential.

The government boasts of its past achievements. Five hundred ninety-four regulations were removed from a total of 14,688 early last year, according to a government-run deregulation portal. But numerical reductions cannot be the goal. The administration must help companies and households work efficiently without wasting energy fighting red tape.

The government must listen to the corporate sector. Civil servants’ love of red tape are responsible for the botched deregulation drives of the past. We hope the administration does not repeat the same mistake. JoongAng Ilbo, Aug. 3, Page 30

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