Entry Regulations Ranked 2nd in OECD... Benefiting Only Foreign Companies

Domestic Companies Face Reverse Discrimination...Industrial Competitiveness Undermined
Experts "Regulatory Exit, Need to Create Cooperation Models"

Jung Manki, Chairman of the Korea Industrial Federation Forum, attended the '10th Industrial Development Forum' held on the 26th at the Automobile Hall in Seocho-gu, Seoul, and delivered a keynote speech on the topic of 'Problems and Improvement Tasks of Entry Regulations.' Photo by Kang Jinhyung aymsdream@

[Asia Economy Reporter Ki-min Lee] Concerns are growing that South Korea's entry regulations are at the highest level among OECD countries, damaging the competitiveness of major industries. Excessive entry regulations compared to competing countries are causing side effects such as discrimination against domestic companies and deterioration of consumer welfare, leading to calls for their bold abolition.

The Korea Industrial Alliance Forum (KIAF) held its 10th forum on the theme of "Entry Regulations, Innovation Competition, and Consumer Welfare" on the 26th at the Automobile Hall in Seocho-gu, Seoul.

According to the OECD index surveyed by KIAF, South Korea's entry regulation level was 1.72, ranking second among OECD countries after Turkey. This is significantly higher than the OECD average of 1.16. The overall Product Market Regulation (PMR) index was also high at 1.69, compared to the OECD average of 1.40.

KIAF's analysis indicates that South Korea's high level of entry regulations, among the highest in OECD countries, results from legislative entry regulations influenced not only by market failure areas but also by collective interest groups. Jeong Manki, chairman of KIAF, criticized, "Despite being an area where market economy should operate, entry regulations almost unprecedented worldwide are imposed under the pretext of protecting small and medium-sized merchants." He added, "Entry regulations are also being strengthened under the influence of interest groups in platform businesses." Chairman Jeong cited the sluggish performance in the food industry (reimport of kimchi and confectionery, decrease in Makgeolli exports), lighting industry (market domination by Chinese products), and distribution industry (offline market contraction), pointing out, "While it is true that in the short term existing small and medium enterprises benefit, in the long term, side effects such as lack of competition and market exit will occur."

The speakers at the event proposed that to operate efficient entry regulations for consumers and industrial development, the government should eliminate constitutionally controversial regulations and create cooperation models rather than regulations. Kwon Yong-su, professor of Convergence Talent Studies at Konkuk University, said, "Nowadays, rather than protecting small and medium enterprises by restricting the market participation of specific companies, it is desirable from the perspective that benefits consumers, companies, and the nation to design systems that efficiently support coexistence among companies and open innovation."

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