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Government should reciprocate with bold deregulation
On Tuesday, four of Korea's major conglomerates announced massive business investment plans totaling nearly 600 trillion won ($472 billion). For starters, Samsung Group will spend 490 trillion won over the next five years to develop new growth engines such as semiconductors, biopharmaceuticals and artificial intelligence. Hyundai Motor Group's three flagship units also plan to invest 63 trillion won in the next three years. In addition, Lotte Group will spend 37 trillion won over the next five years, and Hanwha Group announced similar plans.
Samsung and Hyundai unveiled their U.S. gift packages during President Joe Biden's visit to Korea last week. They then released domestic investment plans of an almost unprecedented scale in what appeared to be favorable responses to the Yoon Suk-yeol administration's private-led growth policy. However, the greater impetus might have reflected a sense of urgency that now is the time to invest, considering the rapidly changing global industrial environment.
The government should actively keep in step with the business community's efforts. Deregulation should not end in lip service but be backed by concrete action plans. Prime Minister Han Duck-soo recently instructed all related ministries to form taskforces for regulatory reform, calling it "the President's will." Unless these words and moves turn out to be mere showmanship, the government should show action with bold deregulation. One of corporate Korea's long-cherished dreams is turning the current positive regulation system into a negative one, in which bureaucrats list some unallowable things and permit all others, as is the case in most advanced countries.
The government also needs to overhaul related laws and institutions. A case in point is the introduction of the Special Act for Regulatory Reform, discussed but suspended in the past. Currently, the world is bombarded with new technologies, but various regulations in individual laws are obstructing them in Korea. For instance, more than 10 laws apply to flying drones. Out of some 1,300 Korean laws, more than 800 contain one regulation or another. The enactment of the special law is expected to remove regulations on various agencies and laws in a lump sum.
