How not to encourage investmentPresident Moon Jae-in chaired the eighth meeting of the presidential committee on jobs at the Cheongju chipmaking base of SK Hynix in North Chungcheong. He endorsed support programs for five new industries including future mobility, semiconductors and bioengineering. The government will earmark 1.77 trillion won ($1.6 billion) to create 107,000 jobs and generate 125 trillion won worth of investment in the five sectors by 2022.
The new growth project will help breathe life into a lethargic Korea Inc. The Korean growth model has lost steam and is taking a real hit from Moon’s income-led growth experiment. External conditions have turned volatile amid monetary tightening and an escalating trade war between the United States and China. The manufacturing sector, our bedrock for growth, investment and employment, has been shriveling with facilities investment and production capacity retreating for the sixth straight month. The president is now rushing to visit large industrial sites to encourage investment personally.
But dropping by industrial sites isn’t the way to get companies to invest. Despite the president’s repeated emphasis on innovative growth, deregulation has been slow due to opposition from pro-labor lawmakers. Pro-union and anticorporate policies still prevail under Moon on his principle of bringing justice to economic practices.
Under such unfriendly conditions, companies will not increase investment or hiring, Germany, Japan and France have shaken out of long lethargies through radical deregulation and more flexible labor policies. Korea must take that path. Moon must separate the economy from ideology and change course of our economic direction if he wants to see sustainable increases in jobs.
JoongAng Ilbo, Oct. 5, Page 30