Deregulate our services industry

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Deregulate our services industry

Casino gambling has formally become legal in Japan after the Upper House passed the bill on Thursday under a strong push by Prime Minister Shinzo Abe to allow integrated casino resorts just a week after it was steamrolled in the lower Diet a week earlier. One long-held taboo in the world’s third-largest economy that traditionally prizes self-control as a virtue has been broken.

Even with 1,273 pachinko parlors active in Japan, Tokyo has been strict against bigger casino gaming. The bill had been heavily contested as proponents argued the casino industry will boost the services sector and draw Chinese tourists ahead of the Tokyo Olympics, while critics fear a surge in gambling addiction as a government survey indicated 5 million people are suffering from their compulsive habit. Still, Abe campaigned hard for the bill to save the foundering Abenomics.

Casino establishment in Japan is very bad news for the Korean tourism industry. Japan has been a rare advanced market without a casino industry. Chinese gamblers fly to Macao, Singapore or South Korea. More than half of the visitors at 16 foreigners-only casino establishments in Korea are Chinese, followed by Japanese. They would prefer to play in Japan. The gap in tourists between Japan and Korea would widen. Seoul must come up with various measures to save the tourism industry before casinos open possibly from 2020.
Japan has opted to allow casinos despite strong opposition because of the stubbornly lethargic economy. Overcapacity manufacturing alone cannot drive economic growth and make jobs.

Korea suffers similar dilemma. The government has been promising service sector vitality for the last decade, but no progress has been made. The services sector merely provides cheap and temporary jobs. Productivity in the services sector has been sagging and now does not even meet half of the standards of the manufacturing industry. The deregulations bills merely gather dust at the National Assembly. With such administrative and political inactiveness, there is no hope for a recovery in next year’s economy.

JoongAng Ilbo, Dec. 17, Page 30

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