Chairman Son Kyung-sik: "Old Regulations Must Be Removed, Government Should Actively Step In"

Son Kyung-sik, Chairman of the Korea Employers Federation

[Asia Economy Reporter Changhwan Lee] Sohn Kyung-shik, Chairman of the Korea Employers Federation, stated that the government should take a more proactive approach to eliminating outdated regulations for a rapid economic normalization after COVID-19.

At the Korea Employers Federation Economic Advisory Committee held on the 24th at a hotel in Jongno-gu, Seoul, Chairman Sohn argued, "Industries with high growth potential and global competitiveness should be further developed through policies such as regulatory innovation."

He emphasized, "The government should be cautious about creating new regulations and actively work to remove outdated regulations that are deeply embedded, so that companies with high potential and enterprising entrepreneurs can fully exercise their creativity and autonomy."

He continued, "For industries with high growth potential in the era of the 4th Industrial Revolution, such as semiconductors, active regulatory innovation and support policies must be backed," adding, "The recent announcement of the K-Semiconductor strategy and the government's active efforts to foster the semiconductor industry is a very timely measure considering the importance of semiconductors that have supported our economy."

However, he mentioned, "Since the U.S. and China provide significant support and investment directly in areas such as new semiconductor plant construction and advanced technology, we expect our government to also take a more active role in financial support for fostering semiconductors as a national key industry and future strategic industry."

Chairman Sohn also pointed out, "The Serious Accident Punishment Act enacted in January this year stipulates very severe penalties for management officials even in fatal accidents without intentional or gross negligence," and stressed, "This has caused serious anxiety among corporate management, so supplementary legislation should be promptly pursued to minimize confusion on the ground."

Policy Support Should Be Strengthened for Struggling Industries

Chairman Sohn argued that policy support should be strengthened by understanding the difficulties faced by struggling industries.

He stated, "Active policy support for vulnerable industries and disadvantaged groups is certainly necessary, but in the case of the minimum wage, if it is excessively raised, most of the burden falls on small and micro enterprises and small business owners."

Therefore, he emphasized, "Rather than an excessive increase in the minimum wage, incentive measures such as expanding the Earned Income Tax Credit, which provides incentives by paying subsidies to low-income workers to boost their motivation to work, are desirable."

He also said, "I hope that reasonable discussions will be held at this year's Minimum Wage Commission," and added, "Our companies will continue efforts for growth through innovation while striving for sound economic development through responsible and transparent management such as ESG management."

Meanwhile, Jeong Gyu-cheol, Director of the Economic Outlook Office at KDI (Korea Development Institute), who delivered the presentation that day, spoke about the domestic and international economic environment, the outlook for the Korean economy, and policy directions.

Director Jeong forecasted, "Korea's economic growth rate in 2021 is expected to reach 3.8%, and considering the overall domestic and international economic conditions, the economic recovery will proceed gradually, but the impact and recovery speed will be uneven across sectors."

He analyzed, "The major risk factors for the Korean economic outlook include three main points: delays in vaccine distribution, economic instability due to uneven recovery speeds among countries, and ongoing U.S.-China trade conflicts."

Regarding future policy directions, he said, "It is time to review not only short-term macroeconomic policies through an expansionary policy stance but also policy normalization measures," adding, "For sustainable economic development, it is necessary to strengthen social safety nets through inclusive policies, promote infrastructure development and institutional reforms to respond to climate change, and prepare expenditure restructuring plans according to structural factors such as demographic and industrial structure changes."

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