The Korea Herald

지나쌤

[Editorial] Too many about-faces

By Korea Herald

Published : Feb. 2, 2015 - 20:26

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The World Economic Forum’s annual report on global competitiveness provides a glimpse of each country’s strengths and weaknesses.

Korea, which scored 26th among 144 countries surveyed in 2014 in terms of overall competitiveness, usually ranks relatively high in such categories as macroeconomic environment, market size, and business sophistication and innovation.

On the contrary, the country lags far behind in the government and public sectors. For instance, Korea ranked 113th in the category of transparency of government policymaking, receiving 3.1 out of 7 points. This put Korea far behind Asian rivals including Singapore, which topped the list with 6.1 points, Hong Kong (fourth), Qatar (fifth) and Japan (10th).

This utterly poor scorecard comes as no surprise, as one need only look at the recent series of cases in which the government set out half-baked policies only to retract them or make abrupt about-faces.

The turmoil started with the annual year-end tax settlement for salaried workers, for which the government introduced a new scheme to withhold less in taxes throughout the year and refund less at the end of the tax year. The changes, which included shifting tax deductions to tax credits, resulted in much smaller refunds for many wage earners than in previous years, which touched off intense public fury.

This pushed down President Park Geun-hye’s approval ratings, forcing officials to come up with hurriedly arranged countermeasures.

Caught off-guard by the brouhaha over the year-end tax settlement, Park and her aides may well have thought that they should call off or delay policy changes that could impose economic burdens on the people.

So Health Minister Moon Hyung-pyo called off the reform of the medical insurance scheme, which was to seek to reduce the burden on low-income, nonsalaried people by obliging high earners to pay more in premiums.

This was followed by the announcement of the Minister of Government Administration and Home Affairs Chong Jong-sup that his ministry would not seek to raise automobile and resident taxes.

Unfortunately for Park and the ministers, the announcements backfired, with the about-faces igniting a new round of criticism, this time of inconsistency and unpredictability in government policies.

In fact, Moon’s announcement came just a day before the Health Ministry was to make public the medical insurance reform plan, which had been in the making for 18 months. Chong’s about-face came just hours after he had said he would “bear his cross” to raise the automobile and resident taxes.

Senior administration officials and Blue House staff held a meeting Sunday to discuss ways to ensure policy coordination and ensure consistency and predictability in government policies. They decided to create or reinvigorate joint meetings and communication channels.

It’s better late than never, but we cannot help but remain skeptical given how this administration has dealt with various reform programs so far and what it aims to accomplish. It is doubtful that a few more meetings will enable it to carry through with tough tasks like reforming the labor market and the deficit-ridden pension plans for government workers.