Deputy Prime Minister Lee Says “To Reform Is To Deregulate”

“To reform means to eliminate regulations that stifle economic growth or business activities. For now, economic growth in Korea is not a choice but a must,” Lee Hun-jae, deputy prime minister and minister of Finance and Economy, clearly expressed his views on “economic reform” and the controversy over “growth vs. distribution.”

At a daily briefing and the luncheon with journalists on Friday, Minister Lee emphasized, “To reform an economy means to ensure fair competition and free, dynamic business activities by eradicating unreasonable regulations.”

He added that if regulations dampened economic growth and business activities, deregulation would be the very act of reform to solve the problem and that such a reform is necessary.

The minister’s remarks have drawn much attention as they are significantly different from those of Cheong Wa Dae, the ruling Uri Party, and the Fair Trade Commission all of which declared to place “regulating large companies” at the core of economic reform.

“We need to achieve five percent growth annually if we are to maintain a reasonable employment rate through the creation of 450,000 to 500,000 jobs every year,” said the minister on the controversial issue of pro-growth vs. pro-distribution policies. “Basic conditions for economic growth cannot be created unless we keep up investment and growth for the reasonable level of employment.”

The financial minister also stressed, “The U.S.’ economic boom in the 1990s began with an economic policy prioritizing growth and employment. Growth is not a choice but a must if we are to keep our economy healthy.”

“Imbalance in wealth distribution can only be eliminated when the economy grows to create more jobs thereby ensuring higher income for the poor,” he said underlining the importance of “distribution through growth.”

As for policy directions, Minister Lee said, “Macroeconomic, monetary policies, and interest rate will stay the same to encourage more investments and job creation as long as there is no inflation caused by high demand.”

“Women, half of our population, will play an important role in opening an era of $20,000 per capita income. Thus, we need to actively secure talented women,” Minister Lee stressed.

The deputy prime minister, who has been in office for a hundred days as of Thursday, commented, “It is a pity that we have yet to see active investments despite various measures taken to boost investments, consumption, and stability of the market.”

Jin-Hup Song jinhup@donga.com