[Column] Abolishing Mandatory Closures for Large Marts... Government Ignites Golmok Sangwon Debate

[Image source=Yonhap News]

As the spread of COVID-19 shows no signs of slowing, small and medium-sized enterprises (SMEs) and small business owners are suffering daily under the government's policy stance that emphasizes market principles. Discussions have begun to publicize the abolition of regulations restricting large mart operations, and a report from a national research institute has even called for the abolition of the SME Appropriate Industry System. There are concerns that the mechanisms protecting small and medium-sized businesses may gradually be dismantled under the name of 'deregulation.'

On the 4th, the Office for Government Policy Coordination held the first Regulatory Judgment Meeting at the Sejong Government Complex, listening to the pros and cons of stakeholders regarding regulations on large mart operations. A heated debate between both sides lasted for three and a half hours. The large distribution industry argues that the system's effectiveness is insufficient, based on various indicators and survey results. However, among small business owners, there is a lament of "why now, of all times." This is because, amid plummeting sales due to social distancing and growing dissatisfaction with loss compensation, they now face a situation where they must fight large corporations over neighborhood markets.

Ronald Reagan, the conservative U.S. president who emphasized a small government and market principles, created the 'Deregulation Task Force' in his first year in office in 1981. Its purpose was to eliminate regulations that reduced corporate productivity. The first target was government regulations on the oil industry, focusing on removing unnecessary costs or obsolete regulations. At least, it was not a method that opened the door for large corporations to penetrate small business neighborhood markets.

On the 3rd, the Korea Development Institute (KDI), under the Ministry of Economy and Finance, released a report stating that the SME Appropriate Industry System has low effectiveness and that gradual abolition should be pursued. The SME Appropriate Industry System, which recommends that large corporations refrain from entering certain industries, has been operated by the Commission for Shared Growth for over ten years. It is highly unusual for a national research institute to call for the abolition of a system under the jurisdiction of another ministry. The problem also lies in reaching conclusions based solely on overall productivity without detailed analysis by appropriate industry sectors. There is an interpretation that the government's influence, which aims for a free market economy, deregulation, and growth ladders, played a role.

When reforming the protective mechanisms for small and medium-sized businesses, social conflict costs and polarization issues must also be considered. National economic development is not about large corporations and small business owners fighting over neighborhood markets but about companies enhancing global competitiveness and increasing investment. Hopefully, criticism that 'the government is siding with large corporations to abolish regulations' will not arise.

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