South Korea should ramp up efforts to ease regulations on its labor, corporate and financial sectors to help stimulate the sputtering economy, an expert said Thursday.
"The level of deregulation for the sectors has not improved much over the past 14 years," Choi Jin-woo, a professor who teaches at Korea University in Seoul, said at a seminar. "The country should push for stronger deregulation to induce tangible economic growth."
The Korea Economic Research Institute under the Federation of Korean Industries, the nation's big business lobby, organized the seminar on deregulation tasks for the South Korean economy's new leap forward.
The professor claimed the score for South Korea's labor, financial and corporate deregulation stood at 6.86 points out of a full 10 in 2013, up a mere 0.6 point from 2000.
Choi said an analysis of members of the Organization for Economic Cooperation and Development shows a country's economy grows by an additional 1.5 percentage points when it deregulates the labor, corporate and financial sectors by 10 percent.
The Park Geun-hye administration has pushed for a series of legislation to reform four major sectors -- labor, finance, education and public services. But the efforts have failed to make tangible progress due to a lack of parliamentary support.
In a meeting with economic ministers Wednesday, Park again stressed the need for deregulation. "We need to make efforts to pass the labor reform bill quickly, which will help create jobs and thus support those who have lost jobs in the restructuring process," she said.
At the seminar, Byun Yang-kyu, a senior KERI economist, urged the government relax regulations on the use of labor. "Many direct regulations on the use of manpower result in a lack of jobs for wage workers and an increase in the number of self-employed people. Such regulations should be eased."
The government's reform push comes as Asia's fourth-largest economy remains in the doldrums in the face of stubbornly weak domestic demand and falling exports stemming from sagging overseas demand for its products.
On Tuesday, the finance ministry also cut its growth outlook for this year to 2.8 percent from an earlier 3.1 percent, citing unfavorable domestic and external factors, including Britain's decision to leave the European Union. The ministry also announced a plan to set up an extra budget of 10 trillion won ($8.7 billion) in the second half to bolster the sputtering economy. (Yonhap)