2^nd Emergency Ministerial Meeting on Economic Affairs

Government Works to Push toward Structural and Regulatory Reforms

Deputy Prime Minister Choo Kyung-ho presided over the second Emergency Ministerial Meeting on Economic Affairs[1] on June 23 to discuss directions for labor market reforms and strategies to carry out economic regulatory reforms, and the progress of a taskforce for regulatory reforms.   

The following is a summary of DPM Choo’s opening remarks.

The economy faces multi-faceted challenges due to rising uncertainty at home and abroad. In response, the new government’s economic team has promptly drawn up policy measures including the secondary supplementary budget of 2022, the new government’s policy directions, measures to stabilize people’s livelihood and prices, and measures to normalize the housing market.

In addition, the government will push ahead with structural and regulatory reforms to improve the economic fundamentals. Structural and regulatory reforms serve not only as a key policy lever to invigorate the economy and develop industries, but also as necessary measures to overcome low growth.

Labor market reforms 

The government announced the new government’s policy directions on June 16, which provided a blueprint for the future through regulatory and structural reforms in the five sectors constituting public service, labor, education, finance, and private service. Among the five sectors, labor market reforms are the first agenda to be discussed.   

The government will carry out labor market reforms by revising rules on working hours and upgrading the wage system to resolve problems in the labor market such as inefficiency, polarization, and unfairness, and preemptively respond to labor and industrial restructurings.  

In addition, the government will make utmost efforts to continuously encourage social discussions about the labor market reforms and seek solutions that satisfy the needs of everyone involved including both employers and employees, the older and younger generations.

Economic regulatory reforms

The government will also focus on carrying out economic regulatory reforms by putting the private sector, businesses, and markets at the core of the economic policy. The new government is committed to implementing economic regulatory reforms by reflecting the needs of the people and businesses to restore the vitality and dynamism of the economy.

To that end, a taskforce for economic regulatory reforms led by Deputy Prime Minister and joined by ministers from related ministries will take an outcome-oriented approach, putting the private sector at the helm. The taskforce will work to produce the first outcome in July by implementing the following action plans.

- Appoint experts with abundant experience and knowledge in the private sector as co-chairs and grant the private sector the authority to discuss and decide on regulatory reforms

- Establish a regulatory review system to verify the adequacy and effectiveness of assessments performed by the taskforce’s working groups[2]

The government will make the most of all possible policy levers to improve regulations, except on safety and health, in line with global standards with a strong resolution to achieve successful regulatory reforms.

Address volatility in the FX market

Major countries’ accelerating tight monetary policies due to global inflation and the resultant concerns about economic slowdowns have continuously weakened the won against the dollar, and other foreign currencies have recently shown similar trends.

To minimize the negative impact of the FX market’s volatility on the economy, the government will take appropriate measures to stabilize the FX market, if necessary, as well as utilize policy efforts to mitigate the supply and demand imbalance.