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Debate over public funds

Posted July. 16, 2000 19:07,   


In a report credited to the opposition Grand National Party`s chief policy maker Mok Yo-Sang and GNP`s head policy maker on the economy field Lee Han-Koo, people of Korea stands to suffer a capital loss on the public funds which were injected into the ailing banks. According to the report on the 16th, the loss could be in the amount of 90 to 110 trillion won. The report further detailed that although a collection of 18 trillion was made by the end of April, 12 trillion won of the collected funds have already been diverted for other public use and the rest have already been allocated for re-injection elsewhere. As such, the net amount of capital fund returned to the treasury stands at zero.

The report by the opposition GNP broke down the figure of the total debt-burden incurred by the government as of 1999. The national debt was pegged at 108 trillion won with another 82 trillion won of surety debts incurred by the private sector. Government also has 4 bond related payment obligations such as pension payments and guaranteed bonds which are estimated at 202 trillion won. Adding to the total debt obligation are the debts incurred by the 13 of the government`s own investment offices as well as others which are estimated at 109 trillion won. Using such figures, the report arrived at the total debt obligation of the government at 582 trillion.

Along with the report, the opposition GNP proposed to present to the National Assembly on the 19th a special legislative bill which could lead to national debt reduction and prevent the budget-deficit through various means including establishment of a ceiling on the approval of budget increase.

The ruling Millennium Democrat Party denounced the opposition GNP stating that the report is grossly irresponsible as it has utilized figures which are baseless and in turn has become a source of great anxiety by the people of Korea. The ruling party further criticized the opposition for rehashing what has already been discussed during the interpellation session.

Jung Sae-Kyun, ruling camp`s policymaker on economic affairs, stated that as the public fund which has been re-injected to the ailing banks will also be collected when the time comes, it would be a misrepresentation of facts to consider the funds un-collectable. He further stated that with such math, any collection of public funds would record a 0% at one time or another.

Also, in response to the alleged current national debt of 582 trillion won, Jung agreed that with the write-off of all loans made by the government and by pretending that the public pension fund has run dry, one could come up with that figure. He pledged that the government will keep a tight control and eye on any situation which could lead to increase of national debt.