Deregulation at heart of reform for top office in face of precarious future

Politics

Published: 08 May. 2024, 20:19 Updated: 08 May. 2024, 20:22

Deregulation at heart of reform for top office in face of precarious future

Members of the diplomatic corps in Korea pose with keynote speakers at the 2024 Korea JoongAng Daily Forum organized by the Korea JoongAng Daily held at the Westin Josun Seoul on Wednesday. [PARK SANG-MOON]

A presidential committee on regulation reform will continue to trim red tape plaguing Korea's regulatory landscape, pledged its chairman on Wednesday, despite the recent election defeat looming over the remaining three years of the Yoon Suk Yeol administration.

“Our top priority in regards to regulatory reform is to make the Korean market more open and integrated with the global economy,” said Kim Jong-seok, co-chairman of the Presidential Regulatory Reform Committee, during his keynote speech at this year's edition of the 2024 Korea JoongAng Daily Forum held at the Westin Josun Hotel in central Seoul.

To that end, “it is vital to make regulations that are currently incompatible with international standards align with global equivalents,” Kim stressed.

This year's forum was attended by some 120 people, including ambassadors, deputy heads of mission and representatives from 42 countries as well as business leaders and executives from major companies under the theme “Korea in the wake of the 2024 general election.”

Along with Kim, Park Sung-min, a leading political analyst, delivered a keynote speech.

During the first keynote session, the regulatory reform committee chair pointed out that “a lot of regulations related to investments and foreign businesses in Korea do not align with global standards.”

Kim blamed such unrealistic and outdated regulations for Korea’s "Galapagos Syndrome" in the business realm, resulting in incongruent progress through relative isolation, saying that “it is regrettable that such regulations [exist] despite the Korean economy’s current level of development.”

A notable example is Uber, suggested the chairman, as such ride-hailing services are prohibited in Korea unless the operators possess taxi-driving licenses.

Kim also stressed that many of the current regulations function as an entry barrier designed to exclusively serve and protect certain interest groups rather than the public.

“With licenses, government approval and certification serving as an entry barrier [to protect certain groups], the Fair Trade Commission is taking a look at the relevant systems, while the Regulatory Reform Committee is making efforts to boldly remove ‘protective regulations’ as well.”

Such a move is in line with the Yoon administration’s policy directives, said Kim.

Another factor that makes the Korean regulatory framework inefficient is its lack of a legal basis, and even when there is one, it often consists of a vague and inconsistent set of rules.

“Government authorities in Korea tend to intervene on the premise of 'administrative guidelines,' which are not based on a legal foundation,” Kim said, noting that the practice is especially pervasive in the financial sector.

Moreover, even laws prohibiting or allowing certain activities often have escape clauses based on discretionary powers, making the rules unpredictable and difficult to grasp.

“It is neither a joke nor an exaggeration when they say 'nothing can be done' in Korea,” said Kim, adding that the committee is urging the government to review regulations that grant government officials excessive discretion.

The Yoon administration established six main areas of focus for this year’s deregulation initiative: encouraging employment and investment; enhancing the quality of life in everyday livelihoods; enhancing social and economic accessibility for the underprivileged; adhering to a negative listing approach with cutting-edge technologies that considers everything permissible by default unless explicitly prohibited by law; encouraging balanced regional growth and promoting carbon neutrality.

Following a question regarding the committee’s plan for ensuring greater social inclusivity for the disadvantaged, Kim noted that though “it may be somewhat inefficient [in the short term], in the long run, an inclusive approach in law enforcement and regulation is actually fairer and more efficient.”

The chairman noted that economic and political polarization is an issue that concerns not only Korea but also the global community, stressing that “one remedy would be that [...] rules and regulation enforcement should be more inclusive and compassionate.”

During the second keynote session, Park Sung-min, the head of public and political consulting firm MIN Consulting, outlined four prospective scenarios that could unfold amid the current political deadlock, or “vetocracy,” in the country.

“The first possibility is President Yoon Suk Yeol wasting his remaining three years in office, with the two parties continuing to clash,” Park said, a scenario that the political analyst said is most probable.

“The second possible scenario is the president reaching political negotiations with Democratic Party (DP) leader Lee Jae-myung and achieving a productive result. However, this is very unlikely.”

Introducing two other “extreme” scenarios, Park raised the possibility of shortening Yoon’s term in office through a constitutional amendment or impeachment.

He noted, however, that impeachment should be avoided, considering the extreme division experienced in Korean society since the historical removal of former President Park Geun-hye.

A more pragmatic scenario, according to Park, involves Yoon's acknowledgment of the prevailing reality and subsequent collaboration with the opposition party, a step deemed essential to any meaningful progress given the legal entanglements faced by the liberal leadership.

When asked if he can foresee cooperation between conservatives and the DP, the analyst suggested that the current precarious situation compounded by the vulnerabilities of key political figures — President Yoon, DP chief Lee and Rebuilding Korea Party chief Cho Kuk — might paradoxically pave the way for political negotiations.

According to Park, the political landscape in Korea has shifted drastically since the former president's impeachment, with the DP winning three consecutive victories in the general election.

“The DP has long been considered an underdog from 1990 through 2017 when former President Park was impeached,” the analyst said, attributing the decline of centrist conservative support to the waning influence of the conservative faction.

The post-Cold War era, he argued, has also bolstered support for the DP, particularly with its advocacy for replacing the armistice agreement between the two Koreas with a peace treaty, underpinning the belief that “peace leads to a better economy,” while in contrast, the conservative party believes that a better economy leads to peace.

Moreover, Park underscored the pivotal role of voters in their 20s and 30s in shaping political outcomes, noting the DP's strategic targeting of this demographic with policies geared toward addressing their concerns.

However, he cautioned against premature predictions regarding the outcome of the 2027 presidential election.

“The key point is that Koreans voted to pass judgment against the Yoon administration rather than out of support for an alternative vision,” Park noted, stressing that the DP could once again lose the next presidential election if it decides to railroad legislation with its dominance in parliament, just like four years ago, despite the conservative People Power Party (PPP) suffering a crushing defeat in the general election last month.

Dignitaries and business leaders who attended the forum gathered insights into the local political landscape after the April 10 general election and exchanged views regarding the Yoon administration’s foreign policy.

“It was interesting to hear not just about regulatory reform, but also from a political analyst about the different aspects of domestic politics,” Jacques Flies, ambassador of Luxembourg to Korea, said after the forum.

“The forum has given us ambassadors and also the business people here a very good opportunity to hear from two real experts who talked very candidly about the reality [of Korean politics] both from the perspective of the senior regulatory commission officer and the political commentator,” said Brazilian Ambassador Márcia Donner Abreu. “I think we got a very good picture of what is going on.”

The assessment resonated with many other ambassadors in attendance, who commented on the appropriateness and astuteness of the analyses by the two speakers.

“The forum was a great initiative, as countries that do business with Korea look at Korea as an important ‘global pivotal state’ and we would very much like to hear suggestions and ideas from all sides,” said Emilia Gatto, ambassador of Italy. “I appreciate the immense task that the chair of the presidential regulatory reform committee has and how he understands the importance of getting all stakeholders aboard. The second analyst raised some very good points and reminded me of how hard it is to predict the future.”

Comparisons between the regulatory reforms of Korea and other countries were made by members of the diplomatic corps present following the first keynote speech by committee co-chairman Kim.

"In Egypt, we are going through the same phase of regulatory reform and revising a lot of the laws, especially how to attract foreign investment into Egypt,” said Khaled Abdel Rahman, Cairo's top envoy to Korea. “So I think we can have a lot of things to share with Korea and to have a consultation between the two governments in this aspect, because Korea has really achieved many successes in this aspect.”

“The presentation about the regulations gave us a lot of chances to hear about what's going on, including on the history, the challenges and basis,” said Ambassador of Serbia Nemanja Grbic. “The most important part was the inclusion of the socially disadvantaged and the regulation on this. And as with many other ambassadors, I was also quite interested to hear about the deregulation in the field of FTAs and especially in agriculture, because Serbia is about to start the negotiations on the FTA with Korea starting this year.”

Regarding the hypothetical outlined by the second keynote speaker, Park, concerning President Yoon’s impeachment as a worst-case scenario in the aftermath of the general election, ambassadors expressed concern about such a possibility becoming a reality.

“The impeachment of the president is the worst thing for the country, and I think the DP of Korea should find ways to cooperate with Yoon and Yoon also maybe should see how to find a compromise with the DP,” said Andrew Chernetsky, the Belarusian ambassador. “The compromise will be a salvation for Korea.”

Participants as pictured: First row from left: Ambassador of Brazil Marcia Donner Abreu; Ambassador of Italy Emilia Gatto; Korea JoongAng Daily CEO Park Chang-hee; Ambassador of Egypt Khaled Abdel Rahman and Ambassador of Ghana Charis Obetsebi-Lamptey Zwennes. Back row from left: Ambassador of Israel Akiva Tor; Ambassador of Tunisia Kais Darragi; Co-chairman of the Presidential Regulatory Reform Committee Kim Jong-seok; political analyst Park Sung-min; Ambassador of Ireland Michelle Winthrop; Ambassador of Luxembourg Jacques Flies; Ambassador of the Dominican Republic Federico Alberto Cuello Camilo; Ambassador of Serbia Nemanja Grbic; Ambassador of Guatemala Sara Solís; Ambassador of Mexico Carlos Peñafiel Soto; Ambassador of Canada Tamara Mawhinney; Ambassador of Costa Rica Jorge Valerio; Ambassador of Colombia Alejandro Peláez Rodriguez; Ambassador of Georgia Tarash Papaskua; Ambassador of Argentina Emiliano Gabriel Waiselfisz; Ambassador of Spain Guillermo Kirkpatrick; Ambassador of Czechia Ivan Jancarek; Ambassador of Jordan Asal Al-tal; Ambassador of Pakistan Nabeel Munir; Ambassador of Belarus Andrew Chernetsky; Ambassador of Kazakhstan Nurgali Arystanov; Ambassador of Tajikistan Salohiddin Kirom and Ambassador of Sierra Leone Kathos Jibao Mattai.

BY SHIN HA-NEE, LIM JEONG-WON AND CHO JUNG-WOO [shin.hanee@joongang.co.kr]