Red Tape Binds
The World Economic Forum announced last year that Korea ranked 104th in the world when it comes to government efficiency. Specifically, the Korean government ranked 96th regarding the magnitude of the burden imposed by government regulations, ranking below even African countries such as Zambia (35th) and Uganda (42nd), not to mention Germany (55th). India took 52nd place in the overall rankings.
Korea’s fintech industry is falling behind, too. According to accounting firm KPMG, no Korean company is found in the world’s top 50 fintech companies of this year. This is because, at least in part, the government has tightened regulations on IT firms for the sake of information security.
As of the end of last year, a total of 14,927 regulatory measures were in effect in Korea. The number had increased from 12,905 to no less than 15,259 between 2009 and 2013. President Park Geun-hye promised aggressive deregulation, but only 342 of them were repealed last year.
Korea is currently in second place on the OECD’s Product Market Regulation (PMR) index on the inhibition of the promotion of corporate activities and competition. Germany ranks 26th and Japan ranks sixth among the 34 member countries on the list released every five years.
Excessive regulations are easily found in the service industry as well. The total number of regulatory measures in the sector amounted to 4,085 last month, when that in the manufacturing sector added up to only 381.