Business group calls for less regulation to revive economy

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Business group calls for less regulation to revive economy

A top business lobbying group representing conglomerates on Tuesday called together some 70 politicians from both ruling and opposition parties, academics and researchers at think tanks and consultants to discuss and push ahead with new mid- and long-term plans that could help revive the Korean economy.

“Korea’s economic growth rate fell a combined two to three percentage points each decade over the past 30 years,” Park Yong-maan, chairman of the Korea Chamber of Commerce and Industries, told the attendees. “Birth rate, in particular, is the lowest among 34 OECD members.”

Many participants in the discussion stressed the need for the Korean government to reform its regulatory system. Businesses in Korea require regulatory approval before they can take action, and the system is focused on “restriction,” they argued whereas many other advanced countries maintain a low initial regulatory barrier, stepping in only if a problem occurs.

“As science and technology advances, preliminary regulations are increasingly losing their efficacy,” said Kim Tae-yoon, a professor of public administration at Hanyang University and a member of the state-run Regulatory Reform Committee. “That could hamper creative drive from the corporate side.”

He took the example of the Internet of Things businesses. Telecom service providers such as SK Telecom and KT, which have ample expertise and experience in communications networks and related technologies, are blocked from developing wireless IoT sensors because the government prohibits service providers from producing devices.

Easing regulations would also lead to the formation of new jobs in new businesses, particularly in the service sector, some participants said. They cited the business of remotely providing medical diagnoses and treatment, which is currently illegal under the Medical Act. If the act is revised, a brand-new career will be created - “remote healthcare expert” - along with a host of relevant industries.

Kim Hyun-soo, professor of business administration at Kookmin University, said night clubs are a promising source of revenue from foreign tourists, but club owners are not eligible to receive bank loans to expand because Korean banking law restrict loans for entertainment venues that cater to adults.

“Groups of young Chinese tourists have been spending as much as 80 million won ($66,434) a night at clubs in southern Seoul,” the professor said. “The clubs could also produce a number of occupations for the younger generation such as bartenders and DJs.”

Chairman Park also pointed to the weakness of Korea’s services industry, noting that the nation’s services share by GDP is only 60 percent, whereas France and Great Britain saw their shares surpass 70 percent as early as the 1970s.

Local government officials cited pervasive anti-corporate sentiment as another stumbling block to economic growth, emphasizing the urgency for companies to “shed outdated convention.”


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