Fifty-seven Government Funds to be Integrated into 39

Fifty-seven government funds will be integrated into 39, including the consolidation of the Korea Technology Credit Guarantee Fund into the Korea Credit Guarantee Fund.

This measure is to organize the complex and slack management of the funds and to raise the efficiency of their financial operations. However, strong protests from the departments in charge of the downsized funds are expected to present difficulties during the integration process.

The Ministry of Planning and Budget (MPB) reported to the National Assembly on Tuesday its evaluation on whether to maintain or close down funds, and recommended that eight of the current 57 funds be closed, two to be turned into private funds, and 11 to be integrated into three funds.

It was the first time this evaluation was conducted after the basic fund management law was revised last year when it was decided that fund management evaluations would be carried out.

According to the evaluation results, a development fund for women, a promotion fund for the cultural industry, a fund to foster the defense industry, a medical emergency fund, a promotion funds for the welfare of laborers, a fund for science and technology, a development fund for the livestock industry, and a fund to encourage property formation savings for farming and fishing villages, which are all similar to budgetary projects, will be closed and their fund management will be transferred to general accounts.

Funds, which don’t need to be maintained as governmental funds such as the funds for the martyrs and patriots of the country and for the promotion of culture and arts, will be changed to private funds managed by the Korea Liberation Association and the Korean Culture and Arts Foundation, respectively.

In order to increase the synergy effect between the funds, some of them will be integrated. The sports promotion fund and the youth support fund will be combined into a sports and youth fund; and the Korea Guarantee Fund, the Korea Technology Credit Guarantee Fund, a housing credit guarantee fund, the Credit Guarantee Fund for Agricultural, Forestry and Fishery Businesses, and a credit guarantee fund for industrial foundation into the Korea Guarantee Fund. The management funds for the Han River, Nakdong River, Kum River, Yeongsan River and the Seomjin River will be consolidated into a general water-system management fund. The MPB will collect opinions from the related departments and hold a party-government conference and public hearing to decide on the consolidation measures for the funds, which are expected to be announced in January next year.

Funds—

A fund is established by law when the government is planning a project with a specific purpose, and as of the end of August 2004, there are currently 57 funds worth approximately 285 trillion won.

Chi-Young Shin higgledy@donga.com