Value context and insight. lkm@koreatimes.co.kr
President Moon urged to listen to investors' voices
Jeffrey Jones, chairman of the board of American Chamber of Commerce / Korea Times photo by Shim Hyun-chul
By Lee Kyung-min
Youth unemployment most urgent issue for Korea
By Lee Kyung-min
A noted international lawyer said that President Moon Jae-in and his administration should listen carefully to the voices of market participants to spur investment and inject new vigor into the economy.
He cited youth unemployment and the low birthrate as the two most serious short- and long-term issues that Asia's fourth-largest economy should address.
“The current administration needs to listen carefully to the voices of investors ― both domestic and foreign ― to determine what investors want and need to increase their investment activity in Korea,” Jeffrey Jones, chairman of the board of the American Chamber of Commerce (AmCham) in Korea, said in a recent interview.
Best known by his nickname “blue-eyed Korean,” Jones has lived in Korea for almost 40 years.
“Companies, large and small, domestic and foreign, need to feel that they are appreciated, that the administration will be passionate about improving the economic and regulatory environment to make companies more efficient and profitable,” he said.
“Listening and then resolving some of the issues raised by those who work day to day in the economy will do much to increase confidence in the future of Korea which in turn will spur consumption and investment.”
Jones is arguably a foreigner with the broadest understanding about various issues in Korea. He began working at law firm Kim & Chang in 1980 and has had a lot of involvement with foreign investors' activities in Korea.
He was appointed by former President Roh Moo-hyun to be a member of the Regulatory Reform Commission, the first foreign national to serve in a government position in Korea.
For his service to the Korean economy, he was awarded the Bronze Tower of Industrial Merit by former President Kim Dae-jung.
Key challenges
The veteran lawyer stressed that unemployed and underemployed young people in their 20s and 30s are the most urgent and significant short term problem the government needs to resolve
.
“Without adequate availability of jobs, young people lose optimism for the future and their zest for living. This is important to continue to spur consumption and give hope that the future will be bright. There are numerous things that can and should be done to improve the outlook of Korea's young.”
In his view, there needs to be greater emphasis on the social acceptability of working in small- and medium-sized companies (SMEs), the nonwhite collar environment and learning skills in various trades.
“Korea employs more than 800,000 foreigners in manufacturing jobs because Korea's college educated youth do not want to work in these types of jobs. Korea's small- and medium-sized industries have difficulty attracting and retaining the young because of perceptions that there is no social status in working for such companies. We need to change that,” he said.
He believes that such a goal can be achieved through boosting tourism and convention businesses which would involve building greater infrastructure.
“Those are the type of jobs young people want to do and Korea still has many untapped resources in tourism and related industries,” he said.
In the long term, he warned that the low birthrate in Korea will reach a crisis in the next few decades with an increasingly aging population and a shrinking workforce needed to support this.
“The declining birth rate ― now the lowest in the world ― has a significant impact on all institutions in Korea including schools, hospitals, police, fire, military and the workforce needed to keep the economy growing,” he said.
The solution to the low birthrate, he added, is in finding a way to lower the cost of raising and educating a child.
“Finances and personal income seem to be the primary factors discouraging young people from having children,” he said.
Blockchain is a game changer
The AmCham chairman thinks that blockchain is a true game changer that will change how people do business, because it has the ability to eliminate mistrust and fraud, he said.
“All of our regulatory environment exists because government doesn't trust companies to do the right thing. But 60 to 70 percent of the mistrust will be eliminated because everything becomes unmistakably transparent with blockchain. There are no fraudulent transactions or hidden transactions whether it is payment of taxes, or reporting of income,” he said.
He added that blockchain will also revolutionize the way we feel about companies because it leaves no room for data manipulation.
“Already with computers it's very hard to hide things, but because you can still make false entries in ledgers in computers you can modify records, manipulate. But with blockchain, you cannot manipulate. It will change cultures.”
He believes that while it is understandable for the government to have a negative view towards blockchain ― mostly associated with speculation, fraud and losses ― regulating an exchange with a clear business plan will solve the problem.
“We have not yet seen a pittance of the use of blockchain because the government and consumers unfortunately have been focused on the coins. A few people have made an extraordinary amount of money in a short period of time by issuing cruptocurrencies. And that has drawn all the attention of the blockchain world,” he said.
He pointed out that the negative view will change if the government regulates the cryptocurrency exchange properly.
“If we regulate the exchange, by having them report the transactions to the financial authorities, it will enable them to trace it. We would be able to prevent money laundering, prevent the exchanges from committing fraud. People would know that the exchange was more reliable.”
A crypto exchange in Jones' words could become like the stock exchange.
“We have only one stock exchange to buy and sell stocks. It has been around so long that we just accept it as part of the ecosystem. But they didn't always exist. The same should go for cryptocurrency exchanges. And if the government regulates them, we don't need to be afraid of them.”