Refusal to create jobs

The café in Vincent Van Gogh’s work “Café Terrace at Night” is at Place du Forum in Arles in southern France. Above the tables and chairs placed on the alleyway outside the café is the same yellow sunscreen as in the painting. The deeper the night gets, the more the star-lit sky above it turns dark blue. In Korea, cafés with terraces are popular because of their European looks. Terraced restaurants, however, were banned in places outside of the 27 special tourist areas across the country. Many Korean filed complaints about why terraced cafés are allowed but such restaurants are not.

The Presidential Council on National Competitiveness decided Friday to allow terraced restaurants in food culture districts and other places designated by mayors or heads of counties or districts. Last year, outdoor restaurants raked in combined revenue of 133.4 billion won (123 million U.S. dollars). If more such restaurants are opened on streets, they can help boost regional economies. The council also proposed the opening of more duty-free shops for foreign tourists in downtown areas. On the same day, the Fair Trade Commission also announced measures to lower entry barriers in the service industry, including allowing private organizations to run mental institutions.

Deregulation in the service industry is a prerequisite for job creation. One-percent growth in the service sector increases employment 0.66 percent, according to the Korea Labor Institute. In contrast, the same growth in manufacturing reduces the number of jobs 0.1 percent. In a world of globalization, the more advanced technology becomes, the fewer jobs are available for less skilled workers. In the service industry, however, jobs and income can grow in accordance with the level of services provided to customers.

While the Fair Trade Commission lowered entry barriers in the service industry, it avoided dealing with the “core” issue of allowing for-profit medical institutions. This came despite the administration announcing measures to boost domestic consumption, including allowing foreign medical institutions open to private investors to operate in free economic zones.

The medical tourism industry is a treasure trove for job creation, as it can create 52 jobs per 1 billion won (922,084 dollars) in investment. The industry is also a field in which Korea has world-class competitiveness. Despite talk of economic bipolarization and the need for job creation, the government is apparently reluctant to open up the "blue ocean market" because of fear of opposition from the ideological groups and those with vested interests in the medical industry. It is cowardly for the government not to try to break new ground though it is aware of the advantages.

Editorial Writer Kim Sun-deok (yuri@donga.com)