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[Editorial] Too Much Regulation

Posted August. 16, 2006 03:02,   

한국어

Enterprises requested the government to lift regulations to prevent economic downfall through the Korea Chamber of Commerce and Industry (KORCHAM). According to the survey KORCHAM carried out, 95% of enterprises thought that regulations do influence business conditions. 67% of large enterprises and 54% of small and medium enterprises said they will penetrate into new business sectors if the regulations are lifted to a certain extent.

Since the current government took power, the economic growth rate of South Korea has been below global standards. Moreover the economy has been in a downturn phase. It is the common people and the middle class who suffer from low growth rates and the stagnation. Deregulation and the creation of enterprise-friendly sentiment are urgent matters in order to stimulate investment to create jobs, to increase incomes, and to reduce the gap between the haves and the have-nots. Even the government-run research institution Korea Development Institute analyzed that all sorts of administrative regulations eat into the economic growth rate by 0.5% point each year. When 0.5% point is added to the growth rate 45,000 jobs are created.

Despite these facts, the Roh administration raised the number of regulations from 7,715 to 7,926. There are quite a few regulations which are reverse discrimination against domestic enterprises like the ceiling on the total amount of investment. The regulations on high grade services in the medical, educational, leisure sectors led the people to consume foreign service goods, resulting in 8.9 billion dollars of service trade deficit in the first half of this year. 180,000 jobs will evaporate as a result.

The current government is going as far as to make ideological regulations by impeding investments and job creations in the capital region under the name of “balanced national development.” While the enterprises complain that such a regulation is keeping them from making investments, the economic minister Kwon Oh-gyu calls it “a minor, irrelevant matter.” Then why can’t he let the people know what the essential matter is and revive the economy? Talking like a critic without being able to solve any problem, the government is bound to be judged by the people as incapable and irresponsible. Everyday the national rage against the government is becoming more and more coarse.

Shouldn’t the government give up its regulating power it holds and let the money circulate in the nation when it has been making failures one after another in its economic policies? Revitalizing the economy by cutting regulation is far more urgent, even though some side effects may arise over the course. A government that blocks economic growth through regulations is no less than an enemy to its people.