U.S. economists express concern about the government's corporate regulation

U.S. economists express concern about the government's corporate regulation - Success or failure of creative economy and economic democratization depend on

Survey on 'Diagnosis of the Korean economy and the new government's economic policy direction'

The greatest weakness of the Korean economy at present is the government's strengthening of corporate regulation and policy for curbing competition. For another take-off, the deregulation and competition policy suitable for global standards is necessary, according to the survey result.

According to FKI survey of 33 U.S. economics professors on "the diagnosis of the Korean economy and the new government's economic policy direction," 81.8% of the respondents classified Korea as an advanced country from the economic viewpoint. On the most necessary policy (plural responses) to take off to the next phase of the Korean economy, 57.6% picked the deregulation and competition policy suitable for global standards and 27.3% singled out the balanced development policy of domestic demand and export through improvement of productivity in the service industry.

<Economic policy for take-off of the Korean economy>

Asked about the weak point of the Korean economy (plural responses), 48.5% picked the government's strengthening of corporate regulation and policy for curbing competition under the recognition that corporate regulation is the bottleneck in economic growth and stability.

Meanwhile, 27.3% and 21.2% cited polarization by concentration of economic power and high external dependence, respectively, indicating that efforts for removal of polarization through improvement of productivity and the balance with export through development of the industry for domestic demand are necessary.

<Weak points of the Korean economy>

Owing to the continuation of low growth rate falling behind the potential growth rate, 39.4% picked industrial restructuring and improvement of productivity as the new government's economic policy direction and 33.3% suggested removal of polarization through regulations on large companies as the direction.

It represents necessity of creating new growth engines and strategy for advanced industry following the Korean economy's loss of growth engines and deterioration of major industries and can be interpreted as the new government's Creative Economy.

As the necessity of removing polarization through regulations on large companies is raised, consideration for owners of small businesses and small and medium-sized enterprises who are suffering from low economic growth most seems to be necessary.

As a means of solving these problems, they proposed autonomy, instead of regulation. Although the necessity of regulations on large companies is raised to solve problems following concentration of economic power, most respondents preferred removal of large companies' monopoly status(75.8%) through market autonomy and competition to the government's artificial regulation (30.3%), including laws and systems.

On the strong point (plural responses) of the Korean economy, 51.5% and 30.3% selected affluent good-quality labor force and large companies' competitiveness, respectively.

Related to this, it seems to need a job creation policy to effectively use high-quality labor force and enhance large companies' competitiveness.

As a policy to enhance the employment rate by reducing economically inactive population, 69.7% suggested the development of the private sector's ability to create jobs through economic growth, rather than job sharing(6.1%) through the introduction of the wage peak system and the flexible work place.

Some 24.2% suggested support for education and business start-up and fostering youth ventures. Meanwhile, nobody suggested the expansion of jobs in the public sector through government expenditures.

Accordingly, support for job creation by enterprises, the subject of employment creation in the private sector, seem to be necessary.

As a supporting measure (plural responses), 69.7% picked enhancement of flexibility in layoff and 15.2% singled out taxational and financial support for employment, indicating that taxational and financial support systems are needed along with strengthening of flexibility of employment through rational improvement of regulations.