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Government’s 5-year plan needs flexible adjustment to reflect reality

Government’s 5-year plan needs flexible adjustment to reflect reality

Posted July. 20, 2017 07:18,   

Updated July. 20, 2017 07:39


The government announced Wednesday a five-year plan on state administration that envisions "a nation of the people, a fair and just Republic of Korea." Under the five goals of state administration including "the government owned by the people," "economy of shared prosperity," and "nation taking responsibility for my life," the new plan entails 20 strategies for state administration, 100 policy tasks and 487 tasks for action. Since the plan is a blueprint for the new administration that the State Affairs Planning Advisory Committee, which served as the presidential transition committee, has drafted, the plan is not much different from President Moon Jae-in’s election pledges, but it is worth paying attention to some of the changes made to reflect the reality.  


The five-year plan is similar in large part to the booklet of President Moon’s election pledges. From the four-point visions in the election pledge booklet including "completion of candlelight revolution," and "shared growth," regional development has been split off to constitute five-point goals of state administration. Placing liquidation of accumulated evils as top priority is the same as in the election pledge booklet as well. The new plan has changed the original election pledge to establish the so-called special committee for investigation and liquidation of accumulated evils to formation of taskforce teams by respective ministries, and has eased the pledge to completely discard the Fair Trade Commission’s exclusive right to file suits against companies to one to seek phased revocation of the right. The plan has also slightly eased the pledge to outright discard the basic subscription fee for mobile telecom service. These measures are apparently taken by considering controversy and realization of the plan.


Notably, President Moon instructed Wednesday the advisory committee to change the timing for transfer of wartime operational control from the U.S. to South Korea from "within the term in office" to "at the earliest date," right before announcing the plan. The timing of wartime operational control transfer has been postponed twice already, and is scheduled after the mid-2020s. Even this requires the preconditions that factors of instability on the Korean Peninsula are addressed and that the South Korean military has secured defense capability and preparedness. The new government is apparently taking the measures with the intention to flexibly respond in consideration of the reality rather than setting a specific timeline by considering the grave security situation, with North Korea continuing provocations with nuclear weapons and missiles. When appointing Song Young-moo as defense ministry, President Moon already said, “Although it is uncertain when it will come….”


The five-year plan only focuses on strengthening equitability, including provision of support to working-class people and small companies in the economy and welfare fields, without presenting new growth engines. A bigger problem is uncertainty in implementing and achieving the goals. The welfare costs including a hike in basic pension and pension for the disabled and childrearing subsidies for children aged 0-5 alone will amount to 77.4 trillion won (68.9 billion U.S. dollars) through 2022, while the whole plan will likely cost 178 trillion won (158 billion dollars), which is 43 trillion won (38 billion dollars) higher than the budget (135 trillion won or 120 billion dollars) of the former Park Geun-hye administration's early days. The new government is avoiding controversy through the rhetoric of an expansion in tax revenue and a cut in expenditures, but the government will find it difficult to implement polices without a massive hike in taxes. The government plans to discuss state finance plans to back up the five-year plan for state administration for two days from Thursday, but we wonder whether the order of process shouldn’t be the opposite.


A new government that just set sail will find it difficult to immediately adjust its election pledges. President Moon has stressed implementation of pledges, saying, “I am the kind of person who gets obsessed with my own words.” However, unlike past administrations, the new government already started state administration immediately after the election and has learned lessons through practical experience for the past 70 days. The new government had some fine-tuning this time, but if it seeks to implement too aggressively by blindly aiming at the goals, it will inevitably generate massive side-effects. As President Moon said, the five-year plan is a blueprint and compass for his administration to move forward. The necessary wisdom for the new government to ensure success in state administration is to adjust goals and direction in light of actual conditions and the possibility to execute, and flexibly respond to shifting environment.