The Park Geun-hye administration appears to have embarked on a process for gaining public consensus on lifting a barriers to promote more active investment in facilities in the metropolitan area surrounding Seoul.
Sources said the government is planning to ease all barriers on building manufacturing facilities in Seoul, Incheon and Gyeonggi Province, a move that could indicate even more deregulation in the future.
The reports come as the Park administration anxiously tries to ignite corporate investment to achieve the ambitious economic growth goals the president recently revealed.
However, the Finance Ministry quickly stepped in, with officials saying Wednesday that while deregulation was being considered, it would be rash to speculate on the scope.
“Deregulation for the metropolitan area is a policy that requires social agreement as it should be implemented in harmony with balanced regional development,” the ministry said.
The ministry also clarified that it would initially unveil measures for vitalizing the provincial economies for a more balanced nationwide development, stressing that these measures would be publicized as early as the first quarter of this year.
Earlier, an anonymous government official was quoted by the local media as saying that “the government will reassess investment-related regulations that are seen to be hampering the Korean economy’s competitiveness.”
According to the report, the official said that the coming reassessment would certainly involve “long-standing controversial tasks” such as deregulating the manufacturing sector in the metropolitan area.
President Park earlier stressed the need for easing the rules all at once instead of in a piecemeal manner in order to create jobs and boost the economy.
Her ideas, however, are likely to be met with a fierce backlash, as deregulating industrial activity in the capital and surrounding districts is an issue that most leaders have been unable to resolve despite the criticism that corporations are unable to expand its businesses here on account of red tape.
Gyeonggi Province has said that excessive regulations blocked more than 10 trillion won ($9.4 billion) worth of investment last year.
Currently, large firms ― specifically conglomerates ― are banned from building new factories or expanding their existing plant facilities. Restrictions on the total area of operation is another big obstacle hampering fresh investment in firms.
Gyeonggi Province and a group of business lobbies have also continued to call for deregulation in the past few years.
There has been speculation that policymakers are moving to relax rules on building factories in the Red tape may be lifted on Seoul investment Incheon Free Economic Zone and the eastern part of Gyeonggi Province and to name new areas for regulatory exemption in building new facilities.
Some market insiders say that other deregulations may include eliminating the transfer fees for non-listed companies seeking mergers, expanding the range of businesses allowed in industrial complexes and easing the paper requirements for small businesses.
Last year, deputy Prime Minister and Finance Minister Hyun Oh-seok had hinted at easing some of the rules.
During his talks with executives of small and mid-sized companies in Siheung, Gyeonggi Province, Hyun said, “Illogical regulations that block investments should not hold companies back.”
In a bid to accelerate investments from the SME sector on facilities, the government is considering financial and capital incentives as well as focusing on improving regulations and administrative processes for the measures, the minister told the participants.
By Kim Yon-se (email@example.com