Wrong Way Moon
Korea's economic scorecard is not looking good. Nearly six years have passed since the Park Geun-hye administration came up with various types of benefits in 2013 to encourage local companies to return home after they relocated overseas. But only 10 companies on average returned home annually, according to data released Monday by the Federation of Korean Industries. In contrast, as many as 886 enterprises returned home to the United States in 2018 alone. In Japan, over 700 companies on average returned home each year during the six-year period.
The problem is not only the number of the so-called "U-turn" or "re-shoring" companies. Domestic facilities investment has frozen and our manufacturing jobs have declined for 16 consecutive months. In the meantime, local companies' overseas investment has noticeably increased as seen in a whopping 45 percent surge compared to last year. Foreigners' investment in Korea has nearly halved. That reflects the grim reality in which our companies increasingly move to other countries while foreign businesses are more reluctant to come to Korea than ever.
The reason is simple: tough business environments for both domestic and foreign enterprises in Korea. The Moon Jae-in administration's reckless income-led growth policy and its uniform enforcement of a 52-hour workweek haven't helped. According to data from UBS, a global investment bank, America ranked fourth and Korea 83th in labor flexibility. As Korea Chamber of Commerce and Industry Chairman Park Yong-maan says, Korea's industries are trapped in "a jungle of regulations." Korea is going in the opposite direction of the United States, which has been upholding the Two for One Rule, one of U.S. President Donald Trump's policies demanding federal agencies cut two existing regulations for every new regulation they implement.
Rubbing salt into the wound is the Moon administration's anti-business attitude. When Korea's semiconductor industry faced a crisis after Japan decided to restrict its exports of hydrogen fluoride — a key material for semiconductor and display production — the ruling Democratic Party accused local companies of "being lazy in developing related technologies on their own." Under such circumstances, who would invest in key technology?
America is booming. France saw its jobless rate plunge to the lowest level since the 2008 global financial crisis. Those two countries know that jobs are created by companies, not the government. Moon must learn lessons from them.
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