Public sector will be forced to reform

The government plans to push ministries and local autonomous bodies to carry forward reforms by linking their results with budgets in order to accelerate reform of the public sector.

Also, it intends to realize privatization of Korea Telecom, POSCO and other state-run corporations ahead of the original schedule, while actively pursuing layoffs and downsizing in the public sector.

Jeon Yoon-Chul, head of the Ministry of Planning and Budget, said August 10 that the government would take the initiative in doing so by utilizing the right to allocate budgets, as the public sector is lagging as far as reform is concerned.

Jeon noted that the public sector had achieved its goal in manpower reduction but that it largely was due to natural reduction or honorary retirement. For this reason, the government will call for layoffs of employees in the public sector.

As for privatization of state-run companies, he said it is better to implement it ahead of schedule. In addition, the companies will be required to focus on core businesses and separate non-core businesses through spin-offs, he stressed.

Still, he said, the government will do its best to avoid an outflow of national wealth by selling companies at their actual value in the process of privatization.