Haste Makes Faulty Policies

Recently, the Korean government has promoted faulty policies that have not been researched thoroughly or that lack practicality.

Because most of these policies have no specific due date or budget, they are criticized for being examples of populism or favoritism in the upcoming presidential election.

The government held an economic policy mediation conference on July 30 at the Gwacheon Government Complex with Minister of Finance and Economy Kwon Oh-gyu present, and announced the “2-step Service Industry Competitiveness General Policy.”

The government allowed farming land to be converted into golfing ranges, and deducted various taxes and fees so that newly built golf courses could be enjoyed at half the current price.

They added that if farmers handed over the invested goods to the contractors, farmers would be able to expand their income.

However, the government had not even estimated how many golfing courses could actually be built on farmland across the nation, and did not consult the ministries when they announced the policies.

In response to this plan, golfing businesses responded that it was an “unrealistic policy.”

The Korea Golf Course Business Association said, “The consumption of golf is in the Seoul metropolitan area, and suburban areas suitable for golfing have already been taken. Customers from the provinces are decreasing.”

At last week’s 2-step Balanced National Development General Policy presentation, the government said it would deduct up to 70 percent of corporate taxes to businesses that establish themselves in or transfer to the provinces.

Regarding this policy, while the government expected 1 trillion won to be given to the improvement of medicine and educational environment in 2008 alone, it did not clarify on how this money was to be raised, and was accused of discriminating against urban businesses.

Due to the Ministry of Planning and Budget’s recent advisory policy to recruit more local workers according to its transfer of 90 public offices from July to December, they have also been attacked for reverse discrimination toward the urban workforce.

Another policy that is widely accused of “ignoring the market principle” is the reduction of credit card commission fees to the self-employed, and loan businesses with lowered interest rates from 66 percent to 49 percent.

In reply, the assistant deputy minister of Finance and Economy said, “Service industry policies are supposed to increase the efficiency of the whole economy, not just to favor a certain class. The current government will exist until the tenure is completed, so this kind of response is unacceptable.”

Professor of Economic Finance at Hanyang University Na Seong-rin says, “The reinforcement of service industry policies is necessary for the competitiveness of our country, but the increased burden of national taxes and the hurried announcement of policies without specifics on how the budget is to be raised can only be suspected of being favoritism policies.”