Sweeping Deregulation to Come by May

The government will decide which corporate regulations are not in line with global standards and lift them by May.

The Knowledge Economy Ministry and the Small and Medium Business Administration announced this plan yesterday to President Lee Myung-bak in a meeting in Gumi, North Gyeongsang Province.

The fuel grading system by engine displacement volume will be unified from August to better inform consumers about fuel efficiency.

In September, next-generation economic growth engines will be decided according to industry.

As early as the second half of the year, a new system will also adjust the price of goods that small firms deliver to conglomerates according to fluctuating prices of raw materials.

The meeting focused on improving conditions for corporate investment, finding new growth engines, securing energy resources, and coping with the United Nations Framework Convention on Climate Change.

By the end of the year, the ministry will report to the National Competitiveness Committee, which is directly under the president, regulations in all fields, including those on location and the environment, the tax system, and relations between labor and management to spur corporate investment.

This is to make deregulation, which has been neglected due to opposition from regulatory authorities, a national agenda through discussion by the committee, in which all ministers must attend meetings.

The government will help small firms raise productivity from 33 percent of a conglomerate’s level to up to 60 percent. The national R&D system, which is under fire for wasting budget due to overlapping investments, will stress achievement and seek to cut its bottom 20 percent of operations every year.

Process renovation will be conducted by integrating information technology in small firms, as their improved productivity will contribute to increasing national wealth in the short term. The period of giving subsidies to experts with master’s degrees or doctorates will increase from one year to three years.

The ministry will unify the standards of fuel grades to let consumers more easily understand fuel efficiency of their cars. The existing system has a combined 40 grades.

The new system will better explain absolute energy consumption efficiency to consumers. If this policy comes into force, people are expected to choose vehicles with high efficiency. For example, the fuel efficiency of the large-size sedan Hyundai Equus (second grade) seems higher under the existing grading system than that of the subcompact Daewoo Matiz (fourth grade).

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