Think Tanks Laud Pres.-elect`s Reform Plan

President-elect Lee Myung-bak yesterday repeatedly urged “drastic" deregulation measures at a meeting with the heads of think tanks.

Kim Jong-seok, president of the Korea Economic Research Institute, suggested a “regulation guillotine system” in which the government abolishes rules found to be ineffective. Proclaiming himself an “economy president,” Lee consistently pledged to ease regulations, but economic experts are asking for more broad and swift reforms.

Last year, the institute proposed the easing or abolishment of 1,664 out of 5,025 regulations registered by the government. Reports say, however, that the think tank felt disturbed after finding that those were just the tip of the iceberg. As for the Ministry of Labor, the number of registered regulations is 160 but behind-the-scene rules are more than 600. This is why the government’s self-admiration about deregulation fails to make a tangible difference to the private sector.

The president-elect is trying to revive the economy by encouraging investment. Creating jobs is the key to resolving social disparity, but it cannot succeed without boosting investment. It is difficult, however, to attract domestic and foreign investment if regulations are more rigid than the competition. In addition, the failure of consumption to rise will mean fewer companies are willing to take a risk. If we seek consumers at home and abroad to spend their money in Korea, we should establish a sound consumer market and have consumers realize the value of money. To that end, a prerequisite is to greatly lower restrictions in a number of service sectors.

Incoming President Lee promised to realize annual growth of seven percent and raise Korea’s status to the seventh-largest economy in the world in a decade. To achieve these ambitious plans, we have to strive to surpass the growth rates of G-7 member nations. Unfortunately, the Korean economy under the Roh Moo-hyun administration grew under five percent. After all, it all comes down to one problem: reform of the general system including productivity, public awareness and labor-management relations. The Roh administration, which refused dramatic reform and neglected improving the entire system, has been judged by the current situation after an unproductive five-year reign.