Companies 'Dissatisfied' with Regulatory Reform Results... Top Priority Reform Area: 'Labor Regulations'

[Asia Economy Reporter Kim Hyewon] It has been found that our companies are generally dissatisfied with the government's regulatory reform achievements.

According to a survey on the '2020 Regulatory Reform Perception' conducted by the Federation of Korean Industries through the polling agency Research & Research targeting 500 companies, the regulatory reform perception score was 93.8, down 0.3 points from the previous year (94.1). A regulatory reform perception score above 100 is interpreted as satisfaction, below 100 as dissatisfaction, and 100 as neutral. After rebounding to 97.2 in 2018, the regulatory reform perception score showed a continuous decline last year and this year.

Only 8.3% of companies were satisfied with the regulatory reform achievements. Dissatisfied companies accounted for 18.4%, about 2.2 times higher. In particular, among small and medium-sized enterprises, the response rate indicating strong dissatisfaction with regulatory reform achievements over the past year was 8.2%, higher than that of large companies (3.6%).

When asked about the reasons for dissatisfaction among 84 companies (35 large companies and 49 SMEs) dissatisfied with regulatory reform achievements, the responses were 'insufficient resolution of invisible regulations' (23.8%), 'insufficient improvement of core regulations' (19.0%), 'new or strengthened regulations' (19%), and 'unchanged regulatory reform mindset of public officials' (19%) in that order.

The areas where the government should prioritize regulatory reform (multiple responses allowed) were 'labor regulations' (41.8%), 'environmental and energy-related regulations' (27.8%), and 'large enterprise regulations' (26.4%). In particular, the response indicating the need for labor regulation reform was more than 14 percentage points higher than other areas.

Regarding the outlook on the current government's regulatory reform policy achievements, negative responses ('very negative' 5.4%, 'negative' 19.6%) accounted for 25.0%, about 2.8 times higher than positive responses ('very positive' 2.2%, 'positive' 6.8%) at 9.0%. The reasons for the negative outlook on regulatory reform achievements were concerns about 'economic democratization and anti-business sentiment' (16.8%) and 'insufficient improvement of core regulations' (12.0%).

Yoo Hwan-ik, head of the Corporate Policy Office at the Federation of Korean Industries, said, "Analyzing past survey results, the regulatory reform perception score was generally high at the beginning of administrations but declined thereafter," urging the government to make continuous efforts to maintain momentum for regulatory reform. He added, "It is necessary to solidify a regulatory management system like the U.S. 2 for 1 rule (when one regulation is newly established or strengthened, two regulations are abolished)."

This content was produced with the assistance of AI translation services.