President-elect Yoon pledges to remove regulations

President-elect Yoon Suk-yeol posted on his Facebook account on Monday that he would make all-out efforts to remove unnecessary regulations like stones in the shoes to support the Korean businesses to grow and create jobs. Following his earlier remark at a meeting with six pmajor economic organizations, where Yoon said, “Businesses making a foray into global markets are like an Olympic athlete who represents his country, but they were required to win a medal with sandbags on their legs,” Yoon reiterated his plan for deregulation.

The sense that excessive regulation is holding our economy back is not new. Given the rapid onset of the fourth industrial revolution and the global competition of high-tech industry that is getting ever more outrageous, there would be no second opinion on the need for deregulation to support businesses to compete in global markets. The regulatory environment perceived by Korean businesses is ranked at 87 out of 141 countries. It is indeed a miracle that South Korea has become the world’s tenth largest economy, with its businesses encircled by regulations.

Former presidents, regardless of whether they were conservative or liberal, vowed to scale back regulatory controls as one of the most urgent affairs of state. Former President Lee Myung-bak removed utility poles at the ramp leading to the Daebul Industrial Complex when he was a president-elect. Former President Park Geun-hye pursued regulatory improvement, saying, “To remove a splinter under a fingernail is more important than to have all these high-sounding policies.” The Moon Jae-in administration also implemented a regulatory sandbox, emphasizing the importance of “eliminating red tape regulations.”

However, no government delivered its promise to achieve regulatory reform, either because they forgot their original intention, after taking office, in the face of numerous pending issues or because they fell into temptation of easy solutions suggested by civil servants pessimistic about regulatory reform. Behind an increase in the number of regulations, which was 1,200 in the first year of the Park Geun-hye administration and rose to 1,491 in the last year of the term, and 1,094 in the first year of the Moon Jae-in administration and rose to 1,510 in 2020, lies such a reason.

To abolish regulations, one must overcome a deep-rooted inertia within the public sector, customary practice, and an erroneous belief in the omnipotence in government-controlled administration. If one new regulation is introduced, twice and thrice of the existing regulations should be mandated to be removed. A special organization specifically tasked with regulatory reform may be established to eradicate civil servants’ inclination for self-preservation to evade responsibility under the excuse of regulations.

The most important is a leader’s strong and consistent determination. If the president-elect delivers his promise to transform the repulsive attitude of public officials towards regulatory reform, Yoon will be praised as a president who powered the COVID-19 stricken economy. At stake is the next administration’s success; Yoon must exert all his efforts from the very beginning of the administration so that regulatory reform does not still remain the biggest concern for the Korean economy five years later.