Next year's national budget has been pieced together. The government is to be praised for spending more on welfare and trying to distribute finances in a way that achieves balanced national development. There are no problems with how things look. But just as there is nothing problematic you also see no evidence of painful agonizing over how to spend.
The government's spending can be summed up with the expression "there's more to spend on but less to spend with." Big ticket items invariably need to be examined from the perspective of a "zero base budget," but they haven't spent the effort. A typical case would be the defense budget. Both this year and next year approximately W9 trillion in government bonds are going to be issued, but nevertheless defense spending is going up 9.8 percent. The general account rate of increase will exceed 8.4 percent. Defense spending will account for 20 percent of pure general accounts. Leaving defense so untouchable makes it hard to adjust to new financial demands such as welfare. The situation has been significantly influenced by president Roh Moo Hyun's designs for "cooperative independent defense." The result is that budget officials got paralyzed when it came to the duty of budget review, since they had to a meet the demands of the Ministry of National Defense for being in line with the will of the president. The defense ministry's military reform plans call for yearly increases of around 11 percent. If that isn't given fundamental reconsideration there will inevitably be less and less room to work with when it comes to the national budget. It is also inconsistent with the Roh government's pledge to build a "Korean peninsula peace regime."
The national debt is also being thought of too easily. The government argues that there's nothing to worry about since the debt will be (by International Monetary Fund standards) 31.9 percent of the GDP and half the 76.4 percent average of Organisation for Economic Cooperation and Development (OECD) member states. With countries that have serious national debt issues like the United States and Japan, however, the OECD average does not provide safety. Welfare spending is outrageously insufficient and therefore will inevitably have to increase, and Korea's situation requires that it have the financial strength to deal with crisis situations such as the cost of reunification and another global financial crisis. The country needs financial reform that is about boldly cutting what needs to be cut and engaging in action instead of words.
The Hankyoreh, 27 September 2005.
[Translations by Seoul Selection (PMS)]
[Editorial] Next Year's Budget Lacks Critical Thinking |
