The red tape menaceA second Blue House meeting aimed at reviewing progress in deregulating our industries was postponed at the last minute. President Moon Jae-in was to preside over the meeting on Wednesday, but he accepted Prime Minister Lee Nak-yon’s request to delay it citing a lack of preparations. Listening to Lee’s explanations, Moon was uneasy about the slow progress in removing red tape across the board.
It could be better to put off a presidential meeting than holding it without substantial progress on the deregulation front. Moon’s message was clear. He urged his aides and ministers to speed up the deregulation process. He also underscored the need for the government to aggressively step in to address conflict between the groups involved.
We share Moon’s perception of the hostility toward radical and speedy deregulation. It is not only the president that is embarrassed at the slow pace of deregulation linked to innovative growth, a new catchphrase of the government. In a recent meeting with Deputy Prime Minister for the Economy Kim Dong-yeon, Park Yong-Maan, chairman of the Korea Chamber of Commerce and Industry, complained about slow progress in deregulation. “We have requested deregulation on 40 occasions over the last four years. But nothing has changed. It is time to fix the problem,” he said.
The Korea Employers Federation (KEF) asked the government to allow for the establishment of for-profit hospitals and telemedicine, ease regulations on online banks and franchise businesses and amend some labor laws overly protective of employees. According to the KEF, some 374,000 jobs can be created if the government lifts regulations in the medical area, and as many as 88,000 jobs can be created in the fields of ICT and fintech if the government eases regulations on internet banks.
Everyone knows why deregulation is tough. The government cannot find concrete solutions because it fears resistance and also wants to avoid potential risks from deregulation. Bureaucrats must tackle the challenge and the president must empower them. The government also must fix its overly pro-labor and anti-market policies. In that sense, the deputy prime minister’s remarks attract our attention. He said he will find a way to flexibly apply the government’s mandatory 52-hour workweek, as in the case of the ICT sector, which has to work 24 hours a day.
Since Moon’s senior secretary for economic affairs was replaced after taking responsibility for the negative consequences of his income-led growth policy, the government must strike a balance between ideals and reality. It must listen to various voices. Policies hurting entrepreneurship cannot succeed in achieving innovative growth.
JoongAng Ilbo, June 28, Page 34