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Aug. 17  2018
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Race to More Liberalization, Race to the Bottom--A look into the liberalization process and its effects in Korea

Ever since the economic crisis, the Kim Dae-jung government of Korea has been promoting series of measures to incorporate Korean economy into the financialised global economy.

Source  :  PICIS


by Choi Seung-Min & Yoon Moon-Young


Ever since the economic crisis, the Kim Dae-jung government of Korea has been promoting series of measures to incorporate Korean economy into the financialised global economy. In particular, the government has been pushing for the establishment of a free trade area in East Asia, with Korea acting as the “business hub”. Since 1998, the government has been negotiating with Japan, US and other countries for a bilateral investment treaty or a FTA, to lay the stepping stones in creating a regional free trade area. This year, the government finally brought its full intentions out into the open. It revealed its plans “to promote Korea as the business hub of Northeast Asia”, starting from the establishment of Special Economic Zones (SEZs) around the country.

The plan recently released by the government outlines a medley of incentives and ‘special’ living conditions for foreigners investing in the SEZ. A new law is waiting to be passed in the National Assembly, which includes clauses granting tax incentives, simplified administrative procedures, exemption from various forms of regulation, and more ‘internationalised’ basic services like education and healthcare. Regulations limiting the construction of resorts, hotels and factories, including those related to protection of the environment, will be eliminated for the benefit of foreign investors. And to make life easier for foreigners inside the SEZ, official documents would be issued in English. This plan was a back off from the original where English was to be granted an official language status inside the zone. Also cancelled was the plan to exempt foreign investors from several labour-related regulations inside the SEZ (read “Less and less freedom for workers” below for more details).

The government’s grandiose plan to turn Korea into a ‘business hub’ of Asia, starting with the establishment of SEZs, is in line with other plans to liberalise, financialise and incorporate Korea into the neoliberal globalisation process. The process was even more sped up with the government’s commitment to the Structural Adjustment Program of the IMF and the Doha Development Agenda of the WTO. Already various measures have been taken to pursue liberalization in the public sectors, and also in the financial sector and the labour market.

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