Reforming key regulations particular to Korea will create more than 63 trillion won ($53.89 billion) in added value and 923,000 jobs, a leading business organization argued in a report Tuesday.
The Federation of Korean Industries (FKI), membered by conglomerates, specified seven types of regulations that govern business and investment activities, ranging from factory construction in or near Seoul and private investment in hospitals to businesses that can only be engaged in by smaller companies. Such regulations are locally referred to as "Galapagos rules" to reflect that they exist either only in Korea or in just a handful of countries, or are enforced more strictly in Korea than in other nations.
Federation of Korean Industries (Yonhap)
The FKI's report said eliminating all seven would bring in 63.5 trillion won in added value and provide new jobs that are more than double the number of unemployed young adults counted in 2014. The report was based on previous research results and employment projections from the Bank of Korea, the FKI said.
Allowing cross-investment between conglomerates and financial institutions, for example, would create 18.6 trillion won in added value plus 214,000 more jobs, according to the report. Easing the boundary on businesses allowed only for smaller firms would mean 16.6 trillion won in added value and 232,000 jobs.
Opening medical institutions to private investment would translate to 14.9 trillion won in added value and 269,000 jobs, and removing restrictions on business operations in Seoul and its vicinity, intended to reduce the concentration of the population and development in the capital, would give the country 11.5 trillion won of added value and 160,000 new jobs, the FKI said.
Other named regulations included the "shutdown rule," a curfew on nighttime online gaming for children, a restriction on an increase of vehicles for quick delivery services and a rule that reins in the operations of holding companies.
"The Galapagos rules are a reason that our corporate competitiveness is dragged down," said Choo Gwang-ho, head of the industrial research division at the FKI. "We need to pursue regulatory reforms from the viewpoint of the national economy and persuade people of different interests by comparing the costs and benefits." (Yonhap)
