Gil Hong-Keun Prime Minister’s Office Republic of Korea Administrative Simplification in Korea October 21 th 2008

2/9 Contents Overcoming the Challenges Ⅰ Strategy for keeping Momentum II Ⅲ Conclusion : Success Factor Ⅳ Performance of Administrative Simplification

3/9 “Big deal” led to reorganization of businesses, unhealthy companies and financial institutions forced out of markets Regulatory Reform Committee reduced the regulations by more than 50% “Big deal” led to reorganization of businesses, unhealthy companies and financial institutions forced out of markets Regulatory Reform Committee reduced the regulations by more than 50% 1998 Full-Scale Structural Reform 1997 Financial Crisis Severe recession in 1998, with output falling by 7% Structural adjustment and regulatory reform, and Market Opening as a new developmental strategy Severe recession in 1998, with output falling by 7% Structural adjustment and regulatory reform, and Market Opening as a new developmental strategy I. Overcoming the Challenges Obstacles in the way of Reform Groups severely affected by mass layoffs, wage cut, and increased poverty, causing a social problem Organized opposition of vested interests who fell off hard in the wake of reform Groups severely affected by mass layoffs, wage cut, and increased poverty, causing a social problem Organized opposition of vested interests who fell off hard in the wake of reform

4/9 Strong and committed political leadership laid foundation for successful structural reform Social consensus on structural reform Legal and institutional Framework for regulatory reform Enhance Transparency and Make business friendly Environment Strong and committed political leadership laid foundation for successful structural reform Social consensus on structural reform Legal and institutional Framework for regulatory reform Enhance Transparency and Make business friendly Environment How to overcome the obstacle Account deficit decreased, the foreign currency reserve rising Repayment of IMF bail-out fund earlier than planned Improvement of external credibility of the nation Account deficit decreased, the foreign currency reserve rising Repayment of IMF bail-out fund earlier than planned Improvement of external credibility of the nation Early Economic Recovery

5/9 II. Strategy for keeping Momentum Institutional Design Established legislatively in the 1998 Basic Act on Administrative Regulations, under the authority of the President The Regulatory Reform Office of the PMO is operating as “Oversight body” Setting the basic direction of regulatory reform and reviewing, monitoring and evaluating the regulatory improvement efforts Established legislatively in the 1998 Basic Act on Administrative Regulations, under the authority of the President The Regulatory Reform Office of the PMO is operating as “Oversight body” Setting the basic direction of regulatory reform and reviewing, monitoring and evaluating the regulatory improvement efforts Presidential Council On National Competitiveness Regulatory Reform Committee & Regulatory Reform Office The President reviews the progress of regulatory reforms which have a significant impact on general public through PCNC Collecting opinions for enhancing national competitiveness and reflecting them in policies The President reviews the progress of regulatory reforms which have a significant impact on general public through PCNC Collecting opinions for enhancing national competitiveness and reflecting them in policies

6/9 Defining Clear Objectives-Targets Enhance National Competitiveness and Create a world-class Business environment Reexamined and reorganized the 40% of the existing 5,000 regulations Make efforts to minimize burdens imposed on business and citizens -Eased requirement on small packaging of medicines (annual savings of $250M) Enhance National Competitiveness and Create a world-class Business environment Reexamined and reorganized the 40% of the existing 5,000 regulations Make efforts to minimize burdens imposed on business and citizens -Eased requirement on small packaging of medicines (annual savings of $250M) The Whole of Government Approach Strategic and Policy Approach Regulatory reform training on first-line civil servants and distributing good practice and Regulation Review Manual RIA Manual published, The result of assessment must be opened Standardized regulatory model for local governments Regulatory reform training on first-line civil servants and distributing good practice and Regulation Review Manual RIA Manual published, The result of assessment must be opened Standardized regulatory model for local governments

7/9 Supporting Tools Government for Citizens(G4C), Government for Businesses (G4B) Government for Foreigners (G4F) for a one-stop e-government shop Government for Citizens(G4C), Government for Businesses (G4B) Government for Foreigners (G4F) for a one-stop e-government shop Administrative simplification through E-government Basic Act on Administrative Investigation Full-scale review for various administrative investigation and revamped unnecessary regulations Full-scale review for various administrative investigation and revamped unnecessary regulations Regulatory Information System Designed to manage the entire life cycle of a regulation, ranging from its creation through maturation to extinction Designed to manage the entire life cycle of a regulation, ranging from its creation through maturation to extinction Enlarge Public Consultation and Encourage Participation Consultation with local government and business groups Receive and resolve demands by 5 largest Korean business associations and local governments Consultation with local government and business groups Receive and resolve demands by 5 largest Korean business associations and local governments

8/9 Implementing improvement plans for Bundled Regulation III. Performance of Administrative Simplification Performance assessment by OECD The number of regulations fell from 10,554 in 1998, to 7,812 in 2003, to 5,112 in 2007 The cost of establishing and operating a business have fallen drastically due to fewer administrative regulations. Simplified regulations have decreased the time and number of tasks necessary to establish a business by 40 percent and reduced administrative costs tenfold The number of regulations fell from 10,554 in 1998, to 7,812 in 2003, to 5,112 in 2007 The cost of establishing and operating a business have fallen drastically due to fewer administrative regulations. Simplified regulations have decreased the time and number of tasks necessary to establish a business by 40 percent and reduced administrative costs tenfold 1,822 detailed improvement plans relating to 68 strategic areas, that involve multiple ministries, rather than single regulations, had been drafted 1,822 detailed improvement plans relating to 68 strategic areas, that involve multiple ministries, rather than single regulations, had been drafted

9/9  Strong support from the political circle, businesses, and the public  Well designed institutional setting  Define clear quantitative targets, clear time plans, and proactive roll-out plan  Establish Efficient Monitoring System  Management tool such as ICT, Public consultation, Satisfaction level survey IV. Conclusion : Success factor

10/9 For More Information ; Dr. Gil Hong-Keun Director General, Prime Minister’s Office Tel : Thank You !