Pie in the skyOn Tuesday, the Moon Jae-in administration staged yet another gaudy event to unfold the details of its bold plan for a Korean New Deal project focused on creating 1.9 million jobs by spending a whopping 160 trillion won ($132.7 billion) — 114 trillion won by the central government and 46 trillion won by local governments and the private sector. The liberal government desires to create jobs in digital and green energy sectors “on a permanent basis” and reform Korea’s industrial structure to prepare for the post-coronavirus era. On top of that, the government seeks to establish a national system to ensure the job security of the entire population.
Moon emphatically said that the gargantuan project will pave the way for Korea to become a global leader for the next century. However, it is not clear if the New Deal will succeed in the face of all the obstacles set up by the government itself — such as suffocating layers of regulation and overly stringent labor policies. The public saw a number of prospective start-ups hit walls due to government regulations in the past, such as the van-hailing service Tada. As a result, 1.7 million Tada customers could not use the service and 12,000 drivers lost their job.
That’s just the tip of the iceberg. Wehome, a room-sharing portal, could not take off because of other regulations. The government’s regulations are so notorious that a Bloomberg column wondered why the land that created K-pop cannot achieve innovations in digital platforms. Without removing such stumbling blocks, the president’s pledge to create jobs in new industries is nothing but a pipe dream.
The same applies to labor policy. Our start-ups are slaves to the rigid 52-hour workweek, a disadvantage in any competition with global companies. Chang Byung-gyu, chairman of the Presidential Committee on the Fourth Industrial Revolution, lamented about the government “taking away jobs from workers” due to the obvious need to work longer than 52 hours a week in many competitive industries.
In a strange turn, the New Deal includes a plethora of weird projects such as replacing old computers with new ones in schools and elevating energy efficiency of houses for public lease. Last month, the National Assembly Budget Office pointed out a slew of “inappropriate projects” when the government came up with a draft of the New Deal. Regardless, the government pushed on. What counts most is a successful ending. The government must create sustainable jobs by reinventing digital and green industries, eliminating stifling regulations and changing its pro-union labor policy. Without such dramatic transformations, the New Deal can never succeed.