President Moon Jae-in yesterday canceled the second regulatory innovation review meeting just three hours before it was scheduled. The meeting was to be attended by major figures from the ruling party, government, and Cheong Wa Dae, including Prime Minister Lee Nak-yeon, chairwoman of the ruling Democratic Party Choo Mi-ae, Deputy Prime Minister Kim Dong-yeon, and presidential chief of staff Im Jong-seok. The reason for the cancellation was that President Moon and Prime Minister Lee were hugely disappointed in the absence of striking ideas and a report filled with the same, unsubstantial ideas even though five months have passed since the first meeting.
The Office for Government Policy Coordination explained the reason for cancellation, by saying, “Prime Minister Lee suggested that the meeting be put off on the grounds that the prepared ideas cannot meet the expectation of people and President Moon accepted his offer.” This is the first time that a meeting presided over by the president has been canceled due to lack of preparation after he took office. From their decision to cancel the meeting, we can imagine how much they got enraged by the unpreparedness of bureaucrats.
In the first meeting, President Moon said, “Innovative growth is possible only with regulatory reform,” emphasizing the need to take a “revolutionary approach.” He called for the early introduction of “regulatory sandbox.” The main agenda for the second meeting was deregulation on the new renewable energy industry, such as drone and solar photovoltaic energy and on the FinTech industry including Internet banks. This agenda was already mentioned by President Moon at the first meeting as the main task that needs to be addressed quickly. Relevant industries have been calling for deregulation and the media as well has been pointing out the need for drastic deregulation.
Nevertheless, Deputy Prime Minister Kim belatedly asked businesses to submit requests for deregulation in mid-June, five months after the first meeting was held in January. Head of the Korea Chamber of Commerce and Industry Park Yong-man lamented this situation, saying, “Most of the 38 requests for deregulation made over the past four years remained unresolved.” Since the innovative growth meeting held in November last year, President Moon has publicly berated relevant officials, for three times, for slow progress in innovative growth by saying, “there is no tangible results,” and “it is too slow.” While he was being briefed by the Prime Minister Wednesday, President Moon reportedly said he was “frustrated.” By the president’s reaction, we can imagine the even bigger frustration felt by businesses and venture companies.
President Moon replaced presidential secretaries for economic affairs and job creation, who led income-led growth, on Tuesday, practically a punitive measure against economy-related secretaries. South Korea is notorious for over-regulation and red tape that there is a saying, “One regulation per one public official.” The cancellation of the second regulatory reform meeting is a warning for Deputy Prime Minister Kim Dong-yeon, who is responsible for renewing the old practices and leading innovative growth.
Against the backdrop where our economy is in crisis at home and abroad, income-led growth, which is a key pillar in our economic policy, is aggravating the economy unlike its purpose of increasing both income and consumption, thereby boosting the economy. This makes the role of innovative growth, the other key pillar, all the more important. Deputy Prime Minister Kim and his staff should be prepared with tangible results at the next regulatory reform meeting. If not, there will be more than calling off the meeting.