[Editorial] Deregulate the Medical & Educational Sectors

The government is reportedly planning to announce late this month drastic deregulation of the medical and educational markets. If implemented, the deregulation will allow the setup of for-profit hospitals and schools and enable foreign investors to run hospitals and schools in Korea for profit. The government has sought this measure since the previous Roh Moo-hyun administration, only to fail due to protests from special interest groups. The deregulation is expected to go through this time without disruption to help create jobs.

The reason for the slow deregulation of the medical and educational markets is resistance from groups with obsolete ideologies. Opponents, including the Korean Teachers and Education Workers’ Union, opposition parties and several civic groups say such deregulation will sacrifice the public benefits of medical and educational services, while worsening the bipolarization of the markets. These arguments, however, are lies aimed at protecting the vested interests of the groups by maintaining “ideological regulations.”

The public will ultimately suffer from the negative impact of failed deregulation of the medical and educational markets. A case in point is the rule allowing the establishment of foreign schools in free economic zones. Prestigious private foreign schools are reluctant to set up schools there because of regulations that allow only nonprofit foreign schools to set up branches and ban them from remitting profits overseas.

In the medical sector, several world-renowned companies sought to set up branches in Korea but gave up in the face of regulatory barriers. The Korean industry is believed to be globally competitive but cannot attract foreign patients due to a slew of regulations. Thailand attracts one million foreign patients a year and Singapore 350,000. Only 25,000 foreign patients come to Korea for treatment.

Deregulating the medical and educational markets requires the overcoming of the egalitarian ideology that has kept outdated regulations intact. Despite its intent to provide equal education to everyone, such an ideology leaves most people disadvantaged and in pain. If the deregulation drive fails this time because of ideological populism, all hopes of foreign investment and job creation in the medical and educational markets will go down the drain.