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Drawing lessons from Roh

Deregulation is the key to making new jobs for the young, but Korea is a regulation powerhouse.
Mar 17,2017
President Roh Moo-hyun has left an expansive legacy. Opinions differ greatly to this day. The Korea-U.S. free trade agreement was his initiative. A decade has passed since the agreement was signed in April 2007. His decisiveness, leadership and boldness made it happen along with his aides’ spirit of competence and determination. The man in charge was former minister of trade Kim Hyun-chong.

“The FTA with the U.S. carries political risk, but it is worthwhile. We are entering unchartered waters. We should have faith in our resilience against the odds in fierce competition,” Roh told his aides. His staff was led by his chief secretary, Moon Jae-in.

A free trade deal with the world’s largest market has been one of Korea’s biggest achievements. It was vehemently opposed by his staunch liberal supporters. They rushed towards the U.S. Embassy in Seoul and cried out for the scrapping of the pact that could sell out the country. It was a typical paranoid response by closed nationalists. Their rally cries go on to this day. Moon saw all this through. But he mostly looked on. He did not restrain Roh in his overly liberal ambitions.

Roh’s biggest work turned out strangely. It was fine-tuned by his conservative successors, Lee Myung-bak and Park Geun-hye. During his campaign, U.S. President Donald Trump complained that the FTA with South Korea was killing jobs in America. As expected, Korea’s car exports to the United States jumped after the deal. Of course, Trump had been exaggerating his criticism, but there was some truth to it.

Moon, who never was a fan of the FTA, has recently changed his tone. He calls for stronger bilateral free trade partnership between the two allies based on the FTA. He has never supported the deal.

Roh’s actions often were not consistent. According to the leaked conversation with North Korean leader Kim Jong-il during summit talks in October 2007, Roh indicated that South Korea could allow North Korea access to its maritime borders in the Yellow Sea, causing huge controversy. Three months earlier, however, he had taken a move in a different direction. He announced a plan to build a new naval base in Gangjeong village, at the southern tip of Jeju Island, to reinforce self-defense capabilities.

Construction of the naval base was finally completed in February 2016 after many delays due to protests. The base sits on a mighty rock overlooking the East China Sea. It can watch the movements of the warships of global powers. China’s aircraft carrier, the Liaoning, anchors in Qingdao port in Shandong province across the Yellow Sea. The Jeju base has been an insightful strategy. Roh had claimed that peace cannot be ensured without arms.

The construction had been numerously disrupted and challenged by protesters. Opposition leaders also joined the protests, feigning to be pupils of Roh. Moon said the policy had started off on the wrong foot. Until this day, he has never really appreciated his boss’ intentions and painful decisions.

The naval base, too, was developed and expanded under the conservative governments of Lee and Park. The project would not have been possible today, given China’s meddling and sensitiveness toward military moves in South Korea.

The economy under Roh struggled. But he nevertheless pursued unconventional deregulation. In his first year in office in 2003, Roh gave LG Philips the green light to build a factory in Paju, Gyeonggi province, northeast of Seoul. Park Byung-won, chairman of the Korea Employers’ Federation, was then the director general of the economic policy bureau at the finance ministry. Paju was heavily protected by regulations related to military facilities, capital zones and cultural assets. Reflecting on how Roh commanded the government to make sure the LG plan went through, Park said, “It’s a pity that no presidential candidates today have such boldness.”

Jobs become scarcer and scarcer for young people. Deregulation is the key to making new jobs for the young, but Korea is a regulation powerhouse. The services, medical, education and tourism sectors still remain underdeveloped and inaccessible due to multi-layered regulations. Regulations feed the power of bureaucrats. Park wanted to bring down regulations, but her move was stopped by the opposition under Moon’s influence. Jobs also cannot increase without reforms in the labor market sector. Yet Moon and his party dithers in fear of irking their trade union voters.

Moon is proposing to create jobs through the public sector. In other words, he seeks the easy way of digging into tax revenue and national coffers to create jobs. But that is not sustainable. The job problem will only be solved through deregulation and labor reform.

Moon’s crackdown targets the corrupt mainstream. The groups resisting labor reform and deregulation also smell of rot. Moon should draw lessons from Roh’s legacies.

JoongAng Ilbo, March 16, Page 35

*The author is a senior columnist of the JoongAng Ilbo.

Park Bo-gyoon