Economic Organization Submits Deregulation Proposals

The economic organizations are searching for a compromise plan about current economic issues such as equity investment limit, simultaneously submitting to the government the proposition of the demand on alleviation of excessive regulations, prior to the meeting between the government and economy circles which will be held in 16th.

The representatives of five economic organizations including the Korea Chamber of Commerce and Industry (KCCI) are supposed to deliver the joint letter of policy recommendations to Ministry of Finance and Economy (MFE) and the Committee for the reform of regulations, at the KCCI club this morning. This joint letter contains a total of 59 deregulation propositions in six fields.

And the Federation of Korean Industries (FKI) will propose a compromise plan such as the lessening of the number of the designated largest groups from 30 to 10, taking into consideration that the government will not easily abandon the designation of 30 largest groups and equity investment limit.

A high official of FKI said that, ``rather than the repetition of the existing opinions, the more reasonable alternatives that can be accepted from both sides are required in order to draw the constructive conclusion. Hence a revision will be made to keep the basic principle of reform and at the same time eliminated the hurdles to corporate activities.``

FKI is planning to propose the plan that will increase the limit of equity investments from 25 percent to 35 percent of net assets, or change the standards to calculate total equity investments: from calculation by companies to calculation by groups, etc.

Such following concession plans are to be submitted: the exclusion of groups ranked below 11th from the conglomerates, flexible application of the debt rate 200 percent according to industrial classification, flexible regulations allowing corporate headquarters in Seoul to freely adjust payment guarantees for their overseas subsidiaries, etc.

The challenge to open regulations that is to be proposed by five economic organizations constitutes eight cases of corporate management, eleven cases of trade, five cases of taxation system, nineteen cases of environment, six cases of industrial location, and eight cases of industrial security.

Five economic organizations made a demand to expand the financial companies` purchasing limit of DA in order to increase exports and cut down the rate of various additional taxes that companies could not keep up. When the government is to establish the budget of state-run construction, the government should earmark the reserved funds for construction in preparation for unanticipated rise of construction cost.

Park Won-Jae parkwj@donga.com