South Korea's economic policymakers are reviving a 15-year effort to enact a framework law on service industry development, with a push to pass the bill this year. The strategy is to exclude healthcare — the issue that repeatedly derailed the legislation over concerns about medical privatization — and instead establish grounds to support other service sectors.
Deputy Prime Minister Lee Hyoung-il said at a meeting of economy-related ministers, which doubled as a service industry development task force, on the 14th that the country needs "second and third runners that can race alongside semiconductors and drive growth." He added, "I ask for the National Assembly's active attention and cooperation so that the service industry bill now before parliament can be enacted this year."
Efforts to pass the law date back to 2011, under the Lee Myung-bak administration. Seeking new growth engines in the aftermath of the global financial crisis, the government submitted a bill to the National Assembly that would have provided a legal basis for deregulation and support across the entire service sector, including finance, healthcare, retail, education and tourism. But because the bill covered health and medical services, it drew a backlash from the Democratic Party, then in opposition. The party argued that measures such as allowing for-profit hospitals serving foreign patients would lay the groundwork for privatizing healthcare. The bill was reintroduced each time a new government took office, but repeatedly stalled amid unresolved disputes.
The Lee Jae-myung administration has therefore shifted course, seeking to enact the law while leaving out the sensitive healthcare sector. Under a compromise, matters governed by five statutes, including the Medical Service Act and the Pharmaceutical Affairs Act, would be excluded from the law's scope. Three of the four bills currently pending in the National Assembly, introduced by both the ruling and opposition parties, reflect that approach. An official at the Ministry of Economy and Finance said concerns over commercializing healthcare had been the biggest obstacle to the legislation, but that the main points of contention had largely been resolved as the two parties found common ground on narrowing the law's scope.
Separately, the government unveiled a plan to support the cosmetics industry, dubbed the K-beauty promotion package. To upgrade the industry, it will ease visa requirements in fields such as medical services and wellness and create a 25 billion won ($17.5 million) venture fund for startup investment. It also plans to help companies obtain certifications required for overseas exports. Another 7.2 billion won ($5 million) will go toward developing artificial intelligence for cosmetics manufacturing and quality control. Skin data on more than 17,000 people in 18 countries, held by the Korea Cosmetic Industry Institute, will be processed for AI training and made available to companies.
Streamlining the K-beauty support structure, now scattered across ministries, remains a challenge. Promotion of the cosmetics industry falls to the Ministry of Health and Welfare, safety oversight to the Ministry of Food and Drug Safety, and tourism to the Ministry of Culture, Sports and Tourism. Even statistics on the domestic market for customized cosmetics are not properly compiled. Joo Hwan-wook, policy coordinator at the Ministry of Economy and Finance, said the domestic service sector receives less support than its growth potential warrants.