Regulatory reforms spurs economic development
Friday, 11 September 2009
Shah Md. Abu Raihan Alberuni
Being one of the poorest agro-based countries in the world in the early sixties, the Republic of Korea (RoK) or South Korea took up massive economic development programmes in earnest since then. An outward oriented economic development strategy, which used exports as the engine of growth, contributed greatly to its radical economic transformation. Based on such strategy, many successful development programmes were implemented. As a result, from 1962 to 2006 its GNI (gross national income) increased from $ 2.3 billion to $ 887.3 billion, with its per capita GNI soaring from $ 87 to about $ 18372. These impressive figures would clearly point out the magnitude of success that such economic programmes have brought about in South Korea.
However, GNI and per capita GNI drastically dropped to $ 340.4 billion and $ 7,335 in 1998 due to fluctuation in foreign exchange rates but these figures returned to the pre-economic crisis level afterward. Once South Korea was an agro-based county and it had no natural resources. It had to import raw materials, oil and machinery and service sector items also.
The imports of South Korea have steadily increased because of its liberalisation policy, increasing national assets and growing per capita income. Being one of the largest import markets in the world, the volume of Koreas imports exceeded those of China in 1995, and were comparable to the imports of Malaysia, Indonesia and the Philippines combined. Major Korean import items included raw materials (30%), capital machinery (30%), oil (30%) and service sector (10%) (finance, transport, construction, company etc.)
A Bangladesh team visited the RoK early January this year. It was informed by the Korean side that in the perspective of 1997 financial crisis that descended to a severe recession in 1998 with output failing by 7.06 per cent. Korea started its regulatory reforms. It constituted its Regulatory Reform Committee (RRC) by enactment of a law. The Korea RRC is comprised of 25 members of whom seven are the Govt. Ministers and 18, private sector representation. It is co-headed by the Prime Minister and a private sector expert. The 18 members from the private sector are experts from various fields, including law, engineering specialists, business management personnel and members of leading civil society, groups such as environmental organisations or consumer protection bodies. The number of representatives from the private sectors was 13 before 2006.
The functions of the RCC in South Korea include (a) determining the basic direction of regulatory policy and research / development of regulatory system, (b) evaluation of new regulations, particularly those which need to be strengthened, (c) evaluation of existing regulations, drafting and executing comprehensive regulatory reform plan, (d) registration and publication of regulations, (e) gathering and considering opinions on regulatory reform, (f) inspection and assessment of actual regulatory reform, progress at each administrative level.
What has so far been done by RRC in RoK? In a sense, the 1997 financial crisis was a blessing in disguise for Korea, which made it possible to get a broad support for structural reform. Since the establishment of Regulatory Reform Committee (RRC) in 1998, it played a leading role in carrying out regulatory reform in order to overcome the crisis.
Results of RRC activities: (a) The Korean government abolished 5,958 regulations and revised 2,981 regulations in 1998 and 1999. This means that more than half of a total of 11,125 regulations were eliminated or rationalised during these two years; (b) The recent goal of Korean government in areas of regulatory reforms is improving and enhancing the regulatory quality and also raising national competitiveness at the level of advanced countries. With this goal, it reoriented the reform process away from simply reducing the number of regulations to a greater focus on regulatory quality.
People's perception of regulatory reform in Korea: The regulatory reform committee conduct surveys each year to hear the people's views and experts' opinions on the regulatory reform. The results of survey are used as feedbacks each year.
(b) Most respondents of the survey have been found to express their positive views in the last three years. But they have not been all that positive about the government's commitment to reform.
Policy formulation process in Korea : (a) According to the Administrative Procedure Act, each ministry should collect opinions of peoples for 20 days through a notification for revising laws or regulations. The purpose of the notification is to secure fairness, transparency and reliability of the administration.
(b) It is compulsory to announce simultaneously the regulatory impact assessment (RIA) along with the notice of pending legislation since July 1, 2006.
(c) People's hearing and comments are also to be undertaken. RRC can also consider the suggestions of the stakeholders in its the regulatory review process. It can hear directly from the members of the community by inviting them to a meeting.
(d) Each administrative ministry has to disclose objectives and key contents of legislative proposal to the media such as official gazette notifications, internet and newspapers. Comments of the stakeholders are accepted with respect and the result has to be notified to commenter. The government can hold a public hearing to collect extensive opinions from experts and citizens.
(e) The government reviews the opinions of the stakeholders and responds individually who express their opinions.
Regulatory Review by RRC : (a) While making a request for regulatory review to the RRC, each ministry must submit the opinion of related stakeholders along with the RIA and the self-review results.
(b) Citizens can submit their comments at any time through various ways including the RRC website and the RRC invites stakeholders, for the committee to directly hear their comments whenever necessary during the review process.
(c) The Administrative Procedure Act and the BAAR guarantees institutional mechanism that help to collect opinions of civil society groups in the regulatory reform process. Civil society groups can request for improving regulation by putting their suggestions and views to the RRC. They may also participate in the initiatives of the committee.
(d) The proposals are then reviewed by the cabinet council and forwarded to the national assembly.
The government of the RoK, as stated at the outset, began regulatory reform in earnest in the 1990. In 1993, about 6,000 regulations were reformed by the Administrative Reform Committee and in 1997, nearly 100 Reform projects were selected for the Regulatory reform Promotion Committee to start its work. Moreover, these reform efforts were mostly limited to resolving simple and minor inconveniences such as reducing the number of required documents.
In Bangladesh, there are more than 10,000 regulations (acts, rules, byelaws, circulars, resolutions etc.) to administer the country, but most of those regulations are hundred years' old and inoperative. They also do not match with the needs of the people under the present conditions. Considering this situation, the government of Bangladesh took some steps to address the present-day needs.
In view of the intricacies involved in regulatory reform process, Regulatory Reform Core Group (RRCG) was formed with the mid-level officials/ executives, from both the government and private sector; the technical assistance for this has been provided by the International Finance Corporation (IPO)-Bangladesh Investment Climate Fund (BICF). The objective of this core group programme, was to expose mid-level, promising and motivated individuals from private sector, to an intensive programme focussing on relevant areas for encouraging them to identify and implement regulatory reforms within their own agencies.
IFC organised various programmes for the RRCG. Those included, among others, holding of workshops/seminars, orientation programmes on computer, English language courses, exposure visits to sites and places, both at home and abroad. In this connection, a seven-day-long exposure visit programme for the RoK, between January 3.0 and January 10 last, was coordinated by Bangladesh Enterprise Institute.
The Bangladesh team visited the office of the Korean Regulatory Reform Commission and also those of the Prime Minister, Anti-Corruption and Civil Rights Commission, Korea Customs Service, Korea post-HANJIN (shipping service) and Seoul Transport Operation. This was purported to facilitating the visiting Bangladesh team to see for themselves the reform process there.
So far the regulatory reform methodology in Bangladesh is concerned, it is to be noted that reform is a continuous process. It was initiated earlier in the land administration sector, but not with much success. There are also reform moves in other sectors. In some cases, a good deal of success has been achieved.
The land acquisition system reform may be cited here. Formerly, there were two main laws for acquisitions of land (I) the Land Acquisition Act, 1894 and (II) The East Bengal (Emergency) Requisition of Property Act 1948. The provisions of these laws were used to acquire the land needed for public purposes or in public interest. Modifying the two old laws, a new ordinance named, the Acquisition and Requisition of Immovable Property Ordinance, 1982, has been promulgated with a view to cutting short the lengthy process and ensuring early delivery of land to the requiring bodies. Under the new ordinance, the Deputy Commissioner has been given power to acquire land up to 10 bighas in an expeditious manner, particularly when there are no objections. Under the new law, the entire land acquisition process is done through the office of the Add. Deputy Commissioner (Rev) with the help of the Land Acquisition Officer. The 1982 Ordinance has simplified the process of issuing notice, hearing objections, finalising the cases and awarding of compensation particularly in respect of land required for development projects at the Upazilla level.
This is a great piece of reform for land acquisition purposes. Like this, many of the laws, which are old and involve a lengthy process, should be modified. The Regulatory Reform Commission can take the initiative to modify the outdated laws with the help of IFC- BICF in Bangladesh.
A few suggestions may be noted here for carrying forward the programme for reforms.
Regulatory Reforms Commission (RRC) may thus be re-structured with the model of Korea's RRC. Some target-based sectors as in the case of Korea and other OECD member-countries, can be selected and the concerned RCC functionaries may be facilitated to have some hands-on experience for the purpose. While designing overseas programmes, meetings among RRCG, IFC and privet sector could be undertaken for sharing views and making assessment needs. Institutions and sectors could also be identified better through such interactions. The cooperation agreement with IFC could be extended for a period of 10 years to deliver technical support to government of Bangladesh to make programmes sustainable.
The writer is a member of the Regulatory Reform Core Group, representing the Ministry of Land as its Deputy Secretary
Being one of the poorest agro-based countries in the world in the early sixties, the Republic of Korea (RoK) or South Korea took up massive economic development programmes in earnest since then. An outward oriented economic development strategy, which used exports as the engine of growth, contributed greatly to its radical economic transformation. Based on such strategy, many successful development programmes were implemented. As a result, from 1962 to 2006 its GNI (gross national income) increased from $ 2.3 billion to $ 887.3 billion, with its per capita GNI soaring from $ 87 to about $ 18372. These impressive figures would clearly point out the magnitude of success that such economic programmes have brought about in South Korea.
However, GNI and per capita GNI drastically dropped to $ 340.4 billion and $ 7,335 in 1998 due to fluctuation in foreign exchange rates but these figures returned to the pre-economic crisis level afterward. Once South Korea was an agro-based county and it had no natural resources. It had to import raw materials, oil and machinery and service sector items also.
The imports of South Korea have steadily increased because of its liberalisation policy, increasing national assets and growing per capita income. Being one of the largest import markets in the world, the volume of Koreas imports exceeded those of China in 1995, and were comparable to the imports of Malaysia, Indonesia and the Philippines combined. Major Korean import items included raw materials (30%), capital machinery (30%), oil (30%) and service sector (10%) (finance, transport, construction, company etc.)
A Bangladesh team visited the RoK early January this year. It was informed by the Korean side that in the perspective of 1997 financial crisis that descended to a severe recession in 1998 with output failing by 7.06 per cent. Korea started its regulatory reforms. It constituted its Regulatory Reform Committee (RRC) by enactment of a law. The Korea RRC is comprised of 25 members of whom seven are the Govt. Ministers and 18, private sector representation. It is co-headed by the Prime Minister and a private sector expert. The 18 members from the private sector are experts from various fields, including law, engineering specialists, business management personnel and members of leading civil society, groups such as environmental organisations or consumer protection bodies. The number of representatives from the private sectors was 13 before 2006.
The functions of the RCC in South Korea include (a) determining the basic direction of regulatory policy and research / development of regulatory system, (b) evaluation of new regulations, particularly those which need to be strengthened, (c) evaluation of existing regulations, drafting and executing comprehensive regulatory reform plan, (d) registration and publication of regulations, (e) gathering and considering opinions on regulatory reform, (f) inspection and assessment of actual regulatory reform, progress at each administrative level.
What has so far been done by RRC in RoK? In a sense, the 1997 financial crisis was a blessing in disguise for Korea, which made it possible to get a broad support for structural reform. Since the establishment of Regulatory Reform Committee (RRC) in 1998, it played a leading role in carrying out regulatory reform in order to overcome the crisis.
Results of RRC activities: (a) The Korean government abolished 5,958 regulations and revised 2,981 regulations in 1998 and 1999. This means that more than half of a total of 11,125 regulations were eliminated or rationalised during these two years; (b) The recent goal of Korean government in areas of regulatory reforms is improving and enhancing the regulatory quality and also raising national competitiveness at the level of advanced countries. With this goal, it reoriented the reform process away from simply reducing the number of regulations to a greater focus on regulatory quality.
People's perception of regulatory reform in Korea: The regulatory reform committee conduct surveys each year to hear the people's views and experts' opinions on the regulatory reform. The results of survey are used as feedbacks each year.
(b) Most respondents of the survey have been found to express their positive views in the last three years. But they have not been all that positive about the government's commitment to reform.
Policy formulation process in Korea : (a) According to the Administrative Procedure Act, each ministry should collect opinions of peoples for 20 days through a notification for revising laws or regulations. The purpose of the notification is to secure fairness, transparency and reliability of the administration.
(b) It is compulsory to announce simultaneously the regulatory impact assessment (RIA) along with the notice of pending legislation since July 1, 2006.
(c) People's hearing and comments are also to be undertaken. RRC can also consider the suggestions of the stakeholders in its the regulatory review process. It can hear directly from the members of the community by inviting them to a meeting.
(d) Each administrative ministry has to disclose objectives and key contents of legislative proposal to the media such as official gazette notifications, internet and newspapers. Comments of the stakeholders are accepted with respect and the result has to be notified to commenter. The government can hold a public hearing to collect extensive opinions from experts and citizens.
(e) The government reviews the opinions of the stakeholders and responds individually who express their opinions.
Regulatory Review by RRC : (a) While making a request for regulatory review to the RRC, each ministry must submit the opinion of related stakeholders along with the RIA and the self-review results.
(b) Citizens can submit their comments at any time through various ways including the RRC website and the RRC invites stakeholders, for the committee to directly hear their comments whenever necessary during the review process.
(c) The Administrative Procedure Act and the BAAR guarantees institutional mechanism that help to collect opinions of civil society groups in the regulatory reform process. Civil society groups can request for improving regulation by putting their suggestions and views to the RRC. They may also participate in the initiatives of the committee.
(d) The proposals are then reviewed by the cabinet council and forwarded to the national assembly.
The government of the RoK, as stated at the outset, began regulatory reform in earnest in the 1990. In 1993, about 6,000 regulations were reformed by the Administrative Reform Committee and in 1997, nearly 100 Reform projects were selected for the Regulatory reform Promotion Committee to start its work. Moreover, these reform efforts were mostly limited to resolving simple and minor inconveniences such as reducing the number of required documents.
In Bangladesh, there are more than 10,000 regulations (acts, rules, byelaws, circulars, resolutions etc.) to administer the country, but most of those regulations are hundred years' old and inoperative. They also do not match with the needs of the people under the present conditions. Considering this situation, the government of Bangladesh took some steps to address the present-day needs.
In view of the intricacies involved in regulatory reform process, Regulatory Reform Core Group (RRCG) was formed with the mid-level officials/ executives, from both the government and private sector; the technical assistance for this has been provided by the International Finance Corporation (IPO)-Bangladesh Investment Climate Fund (BICF). The objective of this core group programme, was to expose mid-level, promising and motivated individuals from private sector, to an intensive programme focussing on relevant areas for encouraging them to identify and implement regulatory reforms within their own agencies.
IFC organised various programmes for the RRCG. Those included, among others, holding of workshops/seminars, orientation programmes on computer, English language courses, exposure visits to sites and places, both at home and abroad. In this connection, a seven-day-long exposure visit programme for the RoK, between January 3.0 and January 10 last, was coordinated by Bangladesh Enterprise Institute.
The Bangladesh team visited the office of the Korean Regulatory Reform Commission and also those of the Prime Minister, Anti-Corruption and Civil Rights Commission, Korea Customs Service, Korea post-HANJIN (shipping service) and Seoul Transport Operation. This was purported to facilitating the visiting Bangladesh team to see for themselves the reform process there.
So far the regulatory reform methodology in Bangladesh is concerned, it is to be noted that reform is a continuous process. It was initiated earlier in the land administration sector, but not with much success. There are also reform moves in other sectors. In some cases, a good deal of success has been achieved.
The land acquisition system reform may be cited here. Formerly, there were two main laws for acquisitions of land (I) the Land Acquisition Act, 1894 and (II) The East Bengal (Emergency) Requisition of Property Act 1948. The provisions of these laws were used to acquire the land needed for public purposes or in public interest. Modifying the two old laws, a new ordinance named, the Acquisition and Requisition of Immovable Property Ordinance, 1982, has been promulgated with a view to cutting short the lengthy process and ensuring early delivery of land to the requiring bodies. Under the new ordinance, the Deputy Commissioner has been given power to acquire land up to 10 bighas in an expeditious manner, particularly when there are no objections. Under the new law, the entire land acquisition process is done through the office of the Add. Deputy Commissioner (Rev) with the help of the Land Acquisition Officer. The 1982 Ordinance has simplified the process of issuing notice, hearing objections, finalising the cases and awarding of compensation particularly in respect of land required for development projects at the Upazilla level.
This is a great piece of reform for land acquisition purposes. Like this, many of the laws, which are old and involve a lengthy process, should be modified. The Regulatory Reform Commission can take the initiative to modify the outdated laws with the help of IFC- BICF in Bangladesh.
A few suggestions may be noted here for carrying forward the programme for reforms.
Regulatory Reforms Commission (RRC) may thus be re-structured with the model of Korea's RRC. Some target-based sectors as in the case of Korea and other OECD member-countries, can be selected and the concerned RCC functionaries may be facilitated to have some hands-on experience for the purpose. While designing overseas programmes, meetings among RRCG, IFC and privet sector could be undertaken for sharing views and making assessment needs. Institutions and sectors could also be identified better through such interactions. The cooperation agreement with IFC could be extended for a period of 10 years to deliver technical support to government of Bangladesh to make programmes sustainable.
The writer is a member of the Regulatory Reform Core Group, representing the Ministry of Land as its Deputy Secretary