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[Editorial] Excess Government

Posted December. 14, 2006 07:22,   

한국어

Japan, which escaped from a long-term economic slump, has been enjoying economic expansion for the 58th consecutive month, thanks to the government’s efforts to make “a small government.” “Japan could get out of its lost decade because the government reduced its role in social welfare and public investment,” the Korea Institute for International Economic Policy (KIEP), a state-funded research organization, reported, The Korean government, which has rampantly launched city development projects under the slogan of balanced development and drawn up measures for improving welfare services on a whim without financial planning, should pay particular attention to it.

The Japanese government has lifted most of the restrictions on corporations in an effort to pursue ‘a small but efficient government’. Meanwhile, the Korean government has done nothing but talk. All the critical regulations still remain unchanged and the number of regulations has rather increased. The government made a lot of fuss about a controversial cap on conglomerates` shareholdings of subsidiaries but also has not even finalized a reform bill on the issue.

Kwon Oh-seung, chairman of Fair Trade Commission (FTC), even claimed that the government should tighten regulations on conglomerates. “The shareholding cap on conglomerates does not directly affect companies. The cap is just second-hand psychological restrictions,” Kwon said recently. However, this is far from reality. Businesses have been delaying investment decisions due to uncertainties over key corporate regulations which have long been in debate. The Fair Trade Commission is, however, still deaf-eared. Sluggish corporate investment causes a vicious cycle of high unemployment, poor consumption and withering growth potential. The FTC is the one that should be blamed.

Businesses have lodged administrative suits against the government for interfering cross-industrial merger and acquisitions among domestic companies. The FTC seems to be ignorant about the global market. The rebellion of businesses against the FTC, dubbed police on economic issues, indicates the seriousness of the problem.

The FTC has been particularly meddling in the newspaper market. The FTC recently announced that it would award cash, to the winners of an essay competition whose topic is illegal or mal-practices of newspaper companies. The FTC is trying to tame newspaper firms critical to the government ahead of the upcoming presidential elections. However, this is not the role of the FTC. The FTC, which has hampered Korean economy by siding with politicians, must be changed so as to revive the economy.