Korea working on new service industry law to expand elderly care, healthcare

[Image source: Gettyimagesbank]

The South Korean government has begun steps to overhaul the local industry structure to ease its dependence on manufacturing by introducing a new bill to promote the service industry as an alternative to the previous basic act, which has seen no progress for 12 years due to opposition from the medical community.

The enactment of the new bill will serve as the basis for systematic support of services for the elderly and single-person households and industrial convergence. However, addressing the controversy over healthcare commercialization in the medical circle will be key to facilitate the upcoming legislative process.

According to the government on Sunday, the Ministry of Economy and Finance, responsible for drafting the new bill, is in the final stages of enactment. The Ministry of Economy plans to submit the bill shortly to the National Assembly and it is likely to be discussed at the meeting of the Economic and Finance Subcommittee under the National Policy Committee as early as this month.

The new bill is aimed at expanding care, healthcare, nursing services for the elderly and delivery services for increasing single-person households in Korea, the fastest aging society in the world.

The bill will include provisions to support joint research between institutes or expand personnel exchanges for cross-industry convergence involving manufacturing and services, according to sources. It will also establish a network, or a service industry convergence research and development innovation support group, which brings together various research institutes to foster the service industry.

In addition, the bill will include measures to foster exports in the service industry as part of the government’s priority on improving the current account balance. It will define the concept of service exports and outline the establishment of a system to support pan-ministerial service exports.

Single-person household [Photo by Yonhap]

The government’s move to enact a new version of the service development act comes as the Korean economy faces a growing need to move away from its focus on manufacturing. Many criticize that Korea’s industrial support policy has been biased toward the manufacturing sector since the nation’s first five-year economic development plan in the 1960s. The service industry has remained sluggish on the absence of a supportive policy.

Three bills are already pending in the Economic and Finance Subcommittee at the National Assembly, and their main purpose is to set up a basic framework to support the service sector. The clauses of the bills call on the Ministry of Economy to establish a service industry development committee and a basic plan for service industry development.

Yet, the dominant view is that this alone won’t be enough to fully support the fast-developing service sector. The Economy Ministry saw the need to further develop existing ideas for the service industry development act and collected feedback from economic and service-related groups in July last year to develop a new bill.

The ruling and opposition parties are generally in agreement with the purpose of the act, but conflict continues over whether to apply it to the healthcare sector. Criticisms have been raised that the government is trying to commercialize public services such as healthcare through the act with the Ministry of Economy and Finance taking the lead, and the Democratic Party of Korea has opposed its passage. This controversy over commercialization of healthcare has been the main reason for the stalemate since the initial proposal of the act in 2011.

The Economy Ministry is looking at how to structure a clause to prevent commercialization of the healthcare industry in the bill, to minimize opposition to have the bill approved by the National Assembly. “Details related to healthcare remain undecided,” said an unnamed official from the ministry. “We will come up with the decision as soon as possible and submit the final draft to the National Assembly.”