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Seoul’s deregulation plan faces provincial backlash

Critics argue eased rules would allow Seoul to draw away investment

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Published : 2014-04-07 20:50
Updated : 2014-04-07 20:50

Some ruling party lawmakers on Monday expressed worries over the government’s latest plans to ease or lift regulations on investment in Seoul and its satellite cities.

The skeptical position taken by some of the Saenuri Party lawmakers on deregulating the country’s largest metropolitan area came during the National Assembly’s interpellation session on the economy sector.

While Saenuri Party said it supports the Finance Ministry’s deregulation target involving both the Seoul metropolitan area and provinces, some legislators from constituencies farther away from Seoul demanded a revision.

“The new plans could seriously undermine the economy of the country’s provincial areas,” said Saenuri Party Rep. Lee Jong-jin, from the Daegu constituency. “Another problem is that the government believes it can pursue balanced growth by lifting the regulations.”

Lee pointed out that naturally, companies would prefer to invest in and near the metropolitan area, not in regions farther away.

Overall, however, the Saenuri lawmakers have claimed that it is imperative that the government lift the red tape in order to trigger corporate investment ― a key element of economic revival.

Meanwhile, most of the opposition parties, including the New Politics Alliance for Democracy, criticized the deregulation movements, arguing that they would help only the larger business groups.

Deputy Prime Minister and Finance Minister Hyun Oh-seok on Monday refuted the criticism.

“Deregulation would be beneficial to the overall economy. It is not for the conglomerate sector,” Hyun said during the interpellation session.

According to industry sources, 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 Finance Ministry earlier said in a statement that “deregulation for the metropolitan area is a policy that requires social agreement as it should be implemented in harmony with balanced regional development.”

Business lobbies say that excessive regulations in Gyeonggi Province are estimated to have blocked more than 10 trillion won ($9.4 billion) worth of investment last year.

It has been speculated that policymakers are moving to relax rules on factory development in the Incheon Free Economic Zone and the eastern part of Gyeonggi Province and to name new areas for regulatory exemption in building new facilities.

By Kim Yon-se (kys@heraldcorp.com)

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